CDOs: Here Come the Lawyers
Here are a couple of different stories about CDOs and lawsuits. The first story concerns Wall Street selling CDOs to municipalities who now are claiming they were unaware of the risks.
From the Finanical Times: Lehman faces legal threat over CDO deals (hat tip Viv)
Lehman Brothers faces the threat of legal action by municipal councils in Australia over the sale of high-risk collateralised debt obligations by the Wall Street bank’s local subsidiary, Grange Securities.
At least two councils in New South Wales and a third in Western Australia are considering litigation against Grange …
The Lehman-originated Federation CDO, exposed to the US subprime mortgage market, was last month marked down to just 16 cents in the dollar by the bank, leaving councils nursing paper losses of 84 per cent.
The sale by Grange and others of many hundreds of millions of dollars worth of CDOs to Australian councils, some of which had 70 per […]
