Each of the regulatory settlements to date with auction rate securities (“ARS”) issuers and brokers has included a provision requiring that the firm consent to a “special arbitration procedure” to deal with investors’ consequential damages relating to the sudden illiquidity of ARS. On December 16, 2008, the Financial Industry Regulatory Authority (“FINRA”) announced the details of this “special arbitration procedure.”
Subprime/Credit Crisis Developments
Update: Court Denies Wachovia Shareholder’s Request to Enjoin the Well Fargo-Wachovia Merger
By Troutman Pepper Locke on
We previously reported on a Wachovia shareholder’s attempt to enjoin the Wells Fargo-Wachovia merger (please click here to view previous post). On December 5, 2008, Judge Albert Diaz of the North Carolina Business Court denied the Wachovia shareholder’s request for a preliminary injunction.
Court Grants Request for Expedited Proceeding By Wachovia Shareholder Seeking To Enjoin Wells-Fargo Merger
By Troutman Pepper Locke on
On October 2, 2008, Wells Fargo presented Wachovia with a signed and Board-approved offer to purchase Wachovia Corporation without government assistance in a stock-for-stock merger transaction valued at $10 billion. Prior to receiving this proposal, Wachovia had been negotiating with Citigroup to complete a merger transaction that included assistance from the federal government.
Latin America An Attractive Alternative Market In Face Of Slowdowns Caused By Global Financial Crisis
A survey of senior executives recently commissioned by credit insurer Atradius and conducted by the Economist Intelligence Unit found that more than 50% of those polled stated that their companies had recently considered expansion in Latin America as the major markets slowed under the weight of the global credit crisis. However, those surveyed also commonly reported concerns about crime, corruption and instability in the region.
N.Y. Reconsiders Regulating Credit Default Swaps as Insurance
In congressional testimony before the House Agriculture Committee on Thursday, November 20, 2008, New York Superintendent of Insurance Eric Dinallo announced that New York is postponing its plans to regulate certain credit default swap contracts (“CDS Contracts”) as insurance. …
Read More N.Y. Reconsiders Regulating Credit Default Swaps as Insurance
Aon General Counsel Testifies Before House Committee on Financial Services on Proposed Insurance Program to Restore Liquidity to Financial Institutions
By Troutman Pepper Locke on
On Tuesday, November 18, 2008, the House Committee on Financial Services held a hearing regarding oversight of the Economic Stabilization Act of 2008 (the “Act”), government lending and insurance facilities, and their impact on the current economy and credit availability. …
Read More Aon General Counsel Testifies Before House Committee on Financial Services on Proposed Insurance Program to Restore Liquidity to Financial Institutions
Industry Analyst Predicts Impact on D&O and E&O Insurers to Total $9.6 Billion
Advisen recently issued three reports, on the D&O market, E&O market and the financial services industry, containing predictions on the impact of the subprime/credit crisis on insurers worldwide.
With respect to D&O claims, Advisen predicts $5.9 billion in losses for claims during 2007, 2008, and 2009. This amount
…
Read More Industry Analyst Predicts Impact on D&O and E&O Insurers to Total $9.6 Billion
Insurance Company Participation in the Troubled Asset Relief Program
As previously discussed here, here, here, and here, in enacting the Emergency Economic Stabilization Act (“EESA”), Congress authorized the United States Treasury to establish the Troubled Asset Relief Program (“TARP”). As part of the Treasury’s effort to inject capital into the credit markets, the Treasury initiated the Capital Purchase Program (“CPP”) as part of the TARP. …
Read More Insurance Company Participation in the Troubled Asset Relief Program
18th International Insurance Convention in Colombia Focuses on Global Credit Crisis
The 18th annual Convencion Internacional de Seguros recently took place in Colombia, with the potential ramifications of the international credit crisis taking center stage together with the pre-planned agenda regarding catastrophic and political, social and financial risks.
…
Read More 18th International Insurance Convention in Colombia Focuses on Global Credit Crisis
Countrywide Derivative Action Dismissed on Standing Grounds
By Troutman Pepper Locke on
On October 7, 2008, the United States District Court for the District of Delaware granted the defendants’ motion to dismiss in In re Countrywide Financial Corporation Derivative Litigation, a consolidated shareholder derivative action alleging breach of fiduciary duty against certain of Countrywide’s directors and officers arising out of Countrywide’s involvement in the subprime lending crisis.
…
Read More Countrywide Derivative Action Dismissed on Standing Grounds