Banking Law

Securities Class Actions Up Thanks to Subprime Mess

After a two-year decrease in filings, federal securities class actions were up in 2007 thanks in large part to subprime-related lawsuits and those against foreign securities issuers. There were 37 subprime cases filed last year, for a total of 23 percent of new securities cases filed. According to the PricewaterhouseCoopers…

Apr 9, 2008 2:05 PM CDT

New Cash Register Receipts Law Rings Up Class Action Bonanza

A new federal law that requires merchants to remove from cash register receipts private information such as more than five digits of a credit card number apparently may have caught some major companies napping. Some 300 class actions have been filed during the 16 months since since the Fair and…

Apr 7, 2008 10:07 PM CDT

Senate Kills Proposal to Allow Bankruptcy Judges to Rewrite Mortgages

A controversial proposal to allow bankruptcy judges to rewrite homeowners’ mortgages has died in the Senate. Sen. Richard Durbin had backed the bankruptcy change, but he agreed to table the proposal so it would not threaten a larger bill to help struggling homeowners, the New York Times reports. Lenders and…

Apr 4, 2008 12:25 PM CDT

Subprime Mess Leads to a Mess of Class Actions

Investors’ class-action lawsuits are on the upswing, spurred by the subprime meltdown. Seventy securities class-action lawsuits were filed in the first quarter of the year, almost equaling the number filed in double the time period last year, ERA Economic Consulting told Portfolio.com. Twenty-six of those suits are tied to subprime…

Apr 3, 2008 5:59 PM CDT

Judge Permits U.S. Trustee to Investigate Countrywide

A federal judge has authorized the U.S. Trustee to investigate whether mortgage processing systems used by Countrywide Financial Corp. have affected “the integrity of the bankruptcy process.” The decision by U.S. Bankruptcy Judge Thomas Agresti of Pittsburgh is believed to be the first confirming the trustee’s power to investigate systematic…

Apr 3, 2008 3:46 PM CDT

Ohio Offers Free Legal Services for Homeowners Facing Forclosure

As home foreclosure rates continue to reach record levels, Ohio’s political leaders are supporting a program that offers free legal representation to Ohioans making below $54,000 a year for a family of four and are in danger of losing their homes. The Save the Dream program involves a network of…

Apr 2, 2008 6:09 PM CDT

‘Assembly Line’ Justice: Business Is Booming for So-Called Foreclosure Mills

The subprime mortgage crisis has been good news for the law firms sometimes known as “foreclosure mills.” Florida law firms that focus on foreclosure work are ramping up their hiring to cope with the big boom in business, the Tampa Tribune reports. In February alone, one law firm, the Florida…

Apr 1, 2008 4:48 PM CDT

New Century GC Sounded Early Warning About Subprime Exposure

The general counsel of New Century Financial Corp. warned of unsound lending practices in a 2004 memo that was apparently ignored, according to a bankruptcy examiner’s report. General counsel Stergios “Terry” Theologides warned in the memo that New Century evaluated borrowers’ ability to repay loans based on initial teaser interest…

Mar 31, 2008 1:27 PM CDT

Misdirected E-Mail Set the Stage for Clear Channel Suits

A misdirected e-mail from Credit Suisse helped set the stage for two lawsuits filed this week by two private equity firms seeking to purchase Clear Channel Communications, the New York Times reports. The suits accuse Credit Suisse and five other banks of breaching a contract to finance the $19.5 billion…

Mar 27, 2008 3:00 PM CDT

O’Melveny & Myers Hit in New Century Report

The bankruptcy examiner who investigated the failure of New Century Financial was irritated by some failures and tactics of the lender’s law firm. A report (PDF) issued by bankruptcy examiner Michael Missal criticized O’Melveny & Myers for discovery delays and witness interviews that could have revealed too much information, the…

Mar 27, 2008 12:34 PM CDT

Paulson Calls for Fed Regulation of Investment Banks

In the wake of last week’s near-collapse of the once-famed Bear Stearns investment bank, U.S. Treasury Secretary Henry Paulson is saying that such investment houses, like regular commercial banks, should be regulated by the federal government. “In a speech to the U.S. Chamber of Commerce, Paulson said the Bush administration…

Mar 26, 2008 9:18 PM CDT

Bad News for KPMG: ‘Scathing’ Report Blames Accountant for Lender’s Failure

A critical report by a lawyer and former SEC official breaks new ground by blaming a Big Four accountant for a failed subprime mortgage lender’s “improper and imprudent practices,” and is viewed as a likely signpost pointing toward potential mortgage-related litigation in a new arena. Investigating on behalf of a…

Mar 26, 2008 8:38 PM CDT

Justice Department Weighing Theories and Evidence in Subprime Crisis

Attorney General Michael Mukasey told reporters \Friday that lawyers at the Justice Department are reviewing information flowing in about the subprime crisis to see if there is a “larger criminal story.” Mukasey said the department hasn’t determined whether the problems merit a response like the corporate fraud crackdown that began…

Mar 24, 2008 6:32 PM CDT

Fed’s Loan to Bear Stearns Broke Its Own Lending Rule

The Federal Reserve makes lending rules. And, in rare circumstances, the Fed also breaks lending rules. That’s the bottom-line lesson from the emergency vote Sunday, by the Fed’s board of governors, that it could and would lend to investment banks such as Bear Stearns at the same interest rate as…

Mar 21, 2008 12:32 AM CDT

6 Private Equity Lawyers Sadly Leave Schiff for Sidley

Six private equity lawyers who are leaving a smaller Chicago firm for a Chicago-based giant say they are doing so regretfully, in order to practice from the bigger platform that Sidley Austin offers. “We have terrible, mixed emotions about this,” S. Michael Peck, 60, who is leading the group from…

Mar 20, 2008 8:06 PM CDT