Subprime/Credit Crisis Developments

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According to a recent report by Bloomberg News, states, cities, hospitals, and other municipal borrowers have now refinanced approximately $96.2 billion of their $166 billion in auction rate bonds, which amounts to about 58% of all auction-rate bonds.  The current $3 billion a week average rate of municipal bond refinancing has slowed a bit from the $5.5 billion a week average in April and May. …
Read More Decline in Municipal Auction-Rate Debt as Various States Continue to Refinance

Apparently prompted by investigations of other brokers and overtures from the New York Attorney General and other regulators, three more broker-dealers have announced intentions to buy back auction rate securities (ARS) or otherwise settle ARS claims. 

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Read More Auction Rate Securities: Voluntary Buy-Backs, Settlements and Settlement Reserves

On July 29, XL Capital (“XL”) announced plans to raise $2.5 billion through an offering of ordinary shares and equity security units, the proceeds of which were to be used to recapitalize Syncora Holdings, Ltd. (formerly known as Security Capital Assurance) (“Syncora”), a bond insurance company that XL spun off in 2006. …
Read More NY Insurance Department Announces Successful Closing of Agreement to Recapitalize Syncora Holdings, Ltd.

UBS has agreed to pay $4.4 million in return for a consent judgment resolving the Massachusetts Attorney General’s investigation of UBS’s sales of auction rate securities (ARS) to Massachusetts municipalities and state agencies. 

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Read More UBS Settles Auction Rate Securities Claims By Massachusetts Attorney General for $4.4 Million

The Connecticut Attorney General, Richard Blumenthal, recently filed separate complaints against The McGraw-Hill Companies, Inc. (as the parent of Standard & Poor’s), Moody’s Corp., and Fitch, Inc.  The complaints were filed in the Connecticut Superior Court, Judicial District of Hartford.  Each complaint contains a single count for violation of Connecticut’s Unfair Trade Practices Act (CUTPA). 

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Read More Connecticut Attorney General Files Complaints Against Rating Agencies

Last week, the U.S. Senate passed H.R. 3221, the Housing and Economic Recovery Act of 2008, which provides measures to shore up Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and provides relief to thousands of homeowners facing foreclosure. …
Read More Housing Bill Prohibiting Tie-Ins to Reverse Mortgages Becomes Law

Cornerstone Research, in cooperation with Stanford Law Schools Securities Class Action Clearinghouse, recently released a report on federal securities class action filings in the first half of 2008. …
Read More Report: Subprime Mortgage and Auction Rate Securities Issues Fuel Increase In Securities Class Action Filings In The First Half of 2008

The New York Attorney General filed a civil complaint yesterday against UBS Securities LLC and UBS Financial Services, Inc. alleging that UBS “committed a multi-billion dollar consumer and securities fraud on the investing public by falsely selling securities facing mounting liquidity risk as cash equivalents.” 

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Read More NY Attorney General Files Auction Rate Securities Complaint Against UBS

According to a recent report in the Boston Globe, an affiliate of the New England Patriots has filed suit against its bond insurer, AMBAC, in an attempt to avoid $2.8 million in accelerated premium payments linked to the troubled auction rate securities (“ARS”) market. 

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Read More New England Patriots Face Auction Rate Securities Crunch