Subprime/Credit Crisis Developments

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Barney Frank (D-MA), Chairman of the House Financial Services Committee, and Paul E. Kanjorski (D-PA), Chairman of the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, recently sent an open letter to SEC Chairman Christopher Cox urging the SEC to take action concerning auction rate securities. 

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Read More Auction Rate Securities: Prominent Congressmen Urge SEC To Take Action

On Thursday, May 8th at 1:00 PM (EST), attorneys from Edwards Angell Palmer & Dodge’s Securities and Government Enforcement team will present a webcast entitled:  What The Subprime/Credit Crisis Means For Your Company as part of the ongoing Association of Corporate Counsel webcast series. 

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Read More Webcast: What The Subprime/Credit Crisis Means For Your Company

For our readers who are interested in the specific allegations contained in the recent shareholder class action complaint against Bear Stearns arising from the JPMorgan buyout, a copy is attached here.The suit, entitled Eastside Holdings, Inc. v. Bear Stearns Cos. Inc. et al., No. 08-CV-2793 (S.D.N.Y. Mar. 17,

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Read More Interested In Reading The Bear Stearns Shareholder Class Action Complaint? See Attached…

Earlier this month, shareholders filed a securities class action against Blackstone Group L.P. (“Blackstone”), its CEO and its CFO over their alleged failure to warn investors that some of the investments managed by Blackstone were performing poorly and that Blackstone was at risk of having to pay back some of its performance fees. 

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Read More Shareholders Sue Blackstone Over FGIC and Other Poorly Performing Investments

In the latest development arising from recent concerns regarding auction rate securities, the New York Attorney General has reportedly launched a wide-ranging criminal investigation by serving subpoenas on 18 firms, including UBS AG, Citigroup, Inc., Merrill Lynch & Co., J.P. Morgan Chase & Co. and Goldman Sachs Group, Inc. …
Read More Auction Rate Securities Update: New York Attorney General Issues Subpoenas To 18 Firms

Michael Travaglini, who oversees the Massachusetts Pension Reserves Investment Management Board, recently voiced his disagreement with California Treasurer Bill Lockyer’s plan to form a state-owned bond insurer, saying that pension funds should not be in the business of insuring securities.  “I am very glad that in Massachusetts we are prohibited by our enabling statutes [from creating a bond insurer],” Travaglini said.  He continued, “I’m in the investment business, not the lending business in any way, shape or form. 

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Read More Massachusetts State Pension Fund Will Not (and Cannot) Form Bond Insurer

New York Superintendent of Insurance, Eric Dinallo, recently revealed that the New York State Insurance Department is working “avidly” to alleviate the capital crisis at bond insurer FGIC.  FGIC was the subject of ratings downgrades by both Fitch Ratings and S&P earlier this year. …
Read More Dinallo: NY is Working “Avidly” to Solve the Crisis at FGIC

Last week, Fitch Ratings downgraded MBIA Insurance Corp. and its subsidiaries from AAA to AA, stating that the bond insurer’s pro-forma claims paying resources at year-end 2007 now fall below Fitch’s AAA capital targets by $3.4 to $3.8bn.  Instead, Fitch concluded that MBIA’s pro-forma claims paying resources fall squarely within its standards for AA capital. 

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Read More Fitch Downgrades MBIA to AA

A Massachusetts Superior Court recently ruled that embattled lender Fremont Investment & Loan (“Fremont”) must obtain written consent from the Massachusetts Attorney General’s office before foreclosing on loans in the state. 

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Read More Fremont Must Get Attorney General’s Permission Before Foreclosing Loans In Massachusetts