Thursday, December 20, 2007

The Lawsuits Begin on the Sub-Primes

Well, let's see how this plays out.

...Barclays is now the first big plaintiff against the major Wall Street brokerage houses.
The United Kingdom bank was burned this summer when they lent $400 million to the firm's funds, whose collapse wiped out $1.6 billion in capital.

Barclay's is essentially claiming fraud, that Bear misled it about the performance of the highly leveraged funds at the time they were collapsing, and Bear was out raising lines of credit and seeking loans to shore the funds up

There will be more--such as the various Governmental money-fund managers who discovered that the cupboard was bare when they attempted to monetize CDO holdings to pay obligations--

Couldn't happen to nicer guys /sarcasm

HT: The Big Picture

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