NERA Releases Update to Credit Crisis Litigation Series

18 June 2009

18 June 2009/New York -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, today released the sixth installment of the firm's credit crisis insights series, An Update on the Credit Crisis Litigation: A Turn Towards Structured Products and Asset Management Firms.

In this paper, co-author Dr. Faten Sabry, Vice President, provides an update on the credit crisis-related securities litigation. The authors highlight emerging trends in a number of areas, including filings, percentage of cases involving directors and officers (D&O), types of defendants and plaintiffs, and recent decisions with emphasis on cases involving complex financial products such as collateralized debt obligations (CDOs) and credit default swaps (CDS).

Emerging Trends in Credit Crisis Litigation

  • Credit crisis filings increased 172% in 2008 over 2007, rising to 188 cases from 69.
  • The percentage of cases in which D&O are named as defendants remains high, with 62% named in suits in 2008, compared to 68% in 2007.
  • Asset management firms became the main defendants in litigation in 2008 as opposed to lenders and home builders in the previous year.
  • Structured products (CDOs and CDS) were involved in 3% of the lawsuits in 2007 and 22% of the lawsuits in 2008.

 

An Update on the Credit Crisis Litigation, co-authored by NERA Vice President Dr. Faten Sabry, Senior Analyst Anmol Sinha, and Associate Analyst Sungi Lee, may be found on the NERA website.

Previous topics in NERA's subprime insights series include:

  • The Subprime Meltdown: A Primer
  • Understanding Accounting-Related Allegations
  • Subprime Securities Litigation: Key Players, Rising Stakes, and Emerging Trends
  • The Use of Economic Analysis in Predatory Lending Cases: Application to Subprime Loans
  • How Did We Get Here? The Story of the Credit Crisis

 

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For over half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 25 offices across North America, Europe, and Asia Pacific.