Credit Crunch Digest - April 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.

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

Litigation and Regulatory Investigations:

o $109 Billion Shareholder Suit Against Wells Fargo Dismissed; Bondholder Action Lives On

o Wells Fargo Settles With the SEC for $11.2 Million

o Washington Mutual Investors Reach Accord in Lending Lawsuit

o Securities Litigation on Track to Set New Record

Fraud and Ponzi Schemes:

o JPMorgan Chase Employees Allegedly ‘In The Know’ Revealed

o Ex-Rothstein COO Takes the Fifth

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

Government and Regulatory Intervention:

o Senate Panel Releases Report Detailing Causes of WaMu Failure

o FDIC Report Says Lehman Creditors Could Have Been Saved Under Dodd-Frank

o Federal Reserve Loaned Money to More Than 100 Failed Banks During the Credit Crisis

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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