Subprime/Credit Crisis Developments

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On September 16, the North American Securities Administrators Association (NASAA) announced that it had reached a settlement with Credit Suisse under which Credit Suisse will buy back $550 million in Auction Rate Securities (ARS) from individuals, non-profits and small businesses with account sizes under $10 million. 

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Read More States Settle Auction Rate Securities Probe With Credit Suisse

On September 18, the Michigan Attorney General announced that it had reached a settlement with Comerica Bank to buy back $1.46 billion in Auction Rate Securities (ARS) from any customer who purchased ARS through Comerica.  (Click here to see the Attorney General’s press release).  This is believed to be the first settlement in which an institution agreed to buy back both retail and institutional investors’ ARS. 

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Read More Michigan Attorney General Settles Auction Rate Securities Probe With Comerica

In an effort to aggressively counter the recent market crisis, the United States Securities & Exchange Commission and United Kingdom’s Financial Services Authority announced today that they have temporarily banned all short-selling in financial companies. …
Read More BREAKING NEWS: SEC AND FSA Ban Short-Selling in Financial Companies

The New York Attorney General recently announced that it had reached a settlement with Fidelity Investments regarding Fidelity’s involvement with auction rate securities (“ARS”).  The settlement, which calls for Fidelity to return $300 million to its customers by the end of the year, is the first settlement reached with a downstream retail broker. 

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Read More Fidelity Reaches Auction Rate Securities Settlement With New York Attorney General

Bank of America recently announced that it has reached a settlement with the Massachusetts Securities Division concerning its involvement in the Auction Rate Securities (“ARS”) market.  (Click here for Bank of America’s press release.) …
Read More Bank of America Reaches Auction Rate Securities Settlement with Massachusetts Securities Division

In the wake of American International Group, Inc.’s (“AIG”) request for a $40 billion bridge loan from the Federal Reserve, New York Governor David Patterson has announced that AIG has been granted “special permission to access $20 billion of capital in its subsidiaries to free up liquidity.”  This will enable, in essence, AIG to make a bridge loan to itself. 

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Read More BREAKING NEWS: AIG Receives Special Permission to Access $20 Billion of Subsidiaries’ Capital

Edwards Angell Palmer & Dodge’s Insurance and Reinsurance Department will host a webinar on the above topic on Monday, September 29, 2008 at 12:00 PM EDT / 5:00 PM BST. …
Read More Edwards Angell Palmer & Dodge Webinar: ‘Mortgage-Backed and Auction-Rate Securities: Structure, Litigation and Insurance Issues’

Reports indicate that state and federal regulators are now turning their attention to Fidelity’s and Schwab’s participation in the Auction Rate Securities (ARS) market. 

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Read More Regulators Probing Fidelity’s and Schwab’s Involvement in Auction Rate Securities Issues

A group of Merrill Lynch entities (Merrill Lynch) recently filed a motion to dismiss a securities class action pending in United States District Court for the Southern District of New York.  The plaintiffs generally assert that Merrill Lynch failed to disclose the extent of its subprime exposure arising out of its holdings in collateralized debt obligations. 

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Read More Merrill Lynch Seeks Dismissal of Subprime Based Securities Class Action