Subprime and punishment
The subprime crisis is moving from the boardroom to the courtroom and Wall Street is in the dock. The number of class action lawsuits rose sharply last year, and more are expected to follow in the coming months. Are further huge losses around the corner for investment banks? Peter Madigan reports
The fallout from the subprime mortgage crisis has started to mushroom. While early attention focused on the multi-billion-dollar writedowns at investment banks, monolines and hedge funds, the consequences are now beginning to be felt more widely. In particular, financial institutions are bracing themselves for a wave of class action lawsuits from disgruntled investors, hit by plunging prices on residential mortgage-backed securities and collateralised debt obligations referenced to subprime
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