Credit Crunch Digest - March 2011


The subprime lending crisis and ensuing credit crunch have resulted in significant losses and numerous lawsuits involving parties to the mortgage lending and securitization process. This digest collects and summarizes recent media reports regarding potential liability, government initiatives, litigation and regulatory actions arising from the subprime mortgage crisis and credit crunch, as well as the increasing number of reported cases of financial fraud.

This issue focuses on recent significant decisions in civil litigation, the status of the Madoff Ponzi scheme, the alleged Rothstein Ponzi scheme, and the status of financial regulatory reform implementation in response to the subprime crisis and credit crunch.

Litigation and Regulatory Investigations

o FDIC Sues Former CEO of Washington Mutual

o Credit Suisse Subprime Securities Suit Settled for $70 Million

o IndyMac Strikes Deal Over Executives’ Sweetheart Loans

Fraud and Ponzi Schemes

o Kenneth Starr Sentenced to Seven and a Half Years

o Picard Targets Ruth Madoff

o Third Named Partner in South Florida ‘Ponzi Firm’ Settles With Trustee

Government and Regulatory Intervention

o ‘Too Big to Fail’ Problem Addressed by New FDIC Rules Sedgwick LLP

o Big Changes on the Way for Fannie Mae and Freddie Mac

o Obama Administration Names Head of New Federal Insurance Office

Please see full newsletter below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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