Free: Litigation: Financial Crisis Update

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Potential Claims From the TARP Program

Bruce G. Vanyo, a partner at Katten Muchin Rosenman, writes that over the last several months, the Troubled Asset Relief Program has provided hundreds of billions of dollars of capital to financial institutions in order to ensure they survive the ongoing economic crisis. Aside from their proposed benefits, the funds come with strings attached that carry the potential for liability, he warns and explores the litigation that may stem from the TARP program in three discrete categories: claims against banks under the False Claims Act; claims against banks for securities laws violations; and claims against the government based on the regulations accompanying TARP funds.

Unintended Consequences for Financial Services Issuers

Scott Reynolds, a partner at Lovells, writes: Over the last several months, many financial institutions that tapped the public securities markets to add billions of dollars to their balance sheets in the face of the financial crisis have been the targets of putative class actions alleging violations of §§11 and 12(a)(2) of the Securities Act of 1933. Those claims differ in important ways from the more familiar securities claims brought pursuant to §10(b) of the Securities Exchange Act of 1934, and can be more difficult to defend.

Actions Heat Up Over CDO Transactions

Scott E. Eckas, a partner at McKee Nelson, writes that, not surprisingly, the dramatic downturn in the housing markets and the broader credit markets generally has resulted in a wave of litigation involving a variety of complex financial products as market participants scramble to limit or recoup losses. He offers a survey of recent litigation arising from one such financial product, the collateralized debt obligation.

Judgment Secured: Now What?

Daniel L. Brown at Sheppard Mullin Richter & Hampton, and Elizabeth M. Rotenberg-Schwartz, an associate at the firm, write that the continuing global financial crisis and related litigation will implicate, if it has not already done so, the collectibility of judgments obtained. In this context, they say, a recent decision of the New York Court of Appeals, answering a question certified by the U.S. Court of Appeals for the Second Circuit, bears close examination.