Colling, Gilbert, Wright & Carter Securites Fraud

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Monday, December 20, 2010

Banks trying to Cut Deal with Regulators over Mortgage Bond Deals

Several major Wall Street banks are in preliminary discussions with securities regulators to put an end to a probe involving the sale of pools of mortgages and other loans called "collateralized debt obligations." (CDOs) and "collateralized mortgage obligations (CMOs). These investment vehicles set the recent financial crisis in motion and almost collapsed the U.S. financial system.

The mortgages were pooled together and then sliced up into tranches for sale to various investors, often with a credit rating that did not adequately reflect the risk associated with the investment. Unfortunately, many of these CDO investments ended up in the hand of individual investors who were looking for conservative, income producing vehicles. When the real estate and credit markets collapsed, they discovered they were holding anything but a conservative investment.

Many of these investments were at the route of bond fund collapses such as the Regions Morgan Keegan (RMK) bond funds, the Oppenheimer Champion Fund, and the Evergreen Short-term Bond Fund. Also, investments in the debt securities of financial institutions such as Lehman Brothers Holdings, UBS Structured Notes, Fannie Mae, Freddie Mac and Bear Stearns collapsed from the weight of poorly performing sub prime mortgages.

If you lost money as a result of an investment in mortgage related investments, please contact our office for a free case evaluation.

posted by William B. Young Jr. Esq. at 8:36 AM

FINRA Vows to Closely Monitor "Fast-Trading Firms

The Financial Industry Regulatory Authority (FINRA) recently announced they will be stepping up surveillance of high-frequency trading firms to insure those firms do not gain a market advantage by side-stepping supervisory guidelines and other industry regulations.

Many observers have long believed so called "fast-trading" firms have been able to gain a competitive advantage over more traditional trading operations, often by skirting the rules. The strategy involves placing a large number of orders to stimulate activity by other traders in a particular issue and then the firm will cancel it's own orders.

This stepped-up surveillance is welcome by may traders who believe the regulators have lagged behind the more sophisticated trading methods employed by the high-frequency trading firms.

posted by William B. Young Jr. Esq. at 8:16 AM

Ernst & Young to Face Fraud Charges over Lehman Brothers Collapse

According to a December 20, 2010 Wall Street Journal article, New York prosecutors are about to file a civil lawsuit alleging accounting giant Ernst & Young stood by and allowed Lehman Brothers to mislead investors (and regulators) about the investment bank's declining financial condition.

Lehman Brothers was one of the big four accounting firms top clients, generating over $100 million in auditing fees from 2001 through the firm's collapse in late 2008. The fraud allegations are part of a larger investigation to determine if a number of banks and financial institutions moved dept off their balance sheets prior to reporting their financial results...thus understating the risk associated with an investment in the companies.

The attorneys at Colling Gilbert Wright & Carter are actively investigating and filing FINRA arbitration claims against financial institutions bases on misrepresentation of the risk associated with investments in those firms. If you have lost money investing in Lehman Brothers or the debt of other banks and brokerages, please contact our office for a free case evaluation. Thank you.

Labels: broker misconduct

posted by William B. Young Jr. Esq. at 8:00 AM

Wednesday, December 1, 2010

Lehman Brothers Bankruptcy Fees Top $1 Billion

A recent Wall Street Journal article reports the legal and consulting fees paid by the Lehman Brothers bankruptcy trustee recently topped the one billion dollar mark. The top fee garners are restructuring firm Alvarez & Marsal, LLC ($369.3 million) and lead bankruptcy counsel ($245.8) million. Given creditors and investors stand to loses billions when all is said and done, it is somewhat surprising there has been little discussion or complaint regarding fees paid out by the trustee.

Among the interested parties are those investors of UBS who purchased Lehman Brothers structured notes called Principal Protected Notes (PPN), Partially Principal Protected notes (PPPN), Return Optimization Notes (RON) and Absolute Return Barrier Notes (ARN). These proprietary structured products were marketed to individual investors much like CD's and other relatively conservative fixed income instruments. After Lehman Brothers filed for bankruptcy protection, on September 15, 2008, many investors filed FINRA arbitration claims alleging they were misled as to the fact they were actually buying unsecured Lehman Brothers debt and the associated risk.

The attorneys at Colling Gilbert Wright & Carter are currently litigating dozens of Lehman Brothers related note cases. If you believe you purchased a Lehman Brothers backed product based on misrepresentation or omission of risk, please contact our offices. Thank you.

Labels: broker misconduct, unauthorized investment

posted by William B. Young Jr. Esq. at 6:32 AM

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