When we first examined the credit crisis and its subsequent litigation in July 2008, the related losses and lawsuits were in their early stages. Preliminary loss estimates were in the range of $125 billion to $945 billion and there were approximately 130 credit crisis lawsuits. As of 12 May 2010, total writedowns and losses stemming from the credit crisis have reached $1.8 trillion worldwide—or approximately 12.5% of US annual GDP—and the total number of credit crisis lawsuits has exceeded 400.

As of April 2010, there are conflicting signals regarding the future of the litigation. On one hand, credit crisis filings have declined and almost half of the decisions to date have been dismissals. However, the types of allegations, products, and defendants continue to shift, and the cases against some defendants, most notably the rating agencies, have survived several motions to dismiss and will proceed. In addition, the regulatory investigations, such as the recent Securities and Exchange Commission (SEC) lawsuit against Goldman Sachs, add to the uncertainty surrounding the direction and focus of the litigation.

This paper examines the current trends in filings, settlements, recent decisions, and the changing nature of allegations in credit crisis lawsuits. The lawsuits, just like the credit crisis, have evolved towards more complex financial products and the trends in allegations, defendants, and plaintiffs have shifted accordingly. The authors discuss trends in filings and Director and Officer (D&O) liability, examine the types of claims alleged in the lawsuits, and review both the types of defendants facing these claims and the plaintiffs asserting them, and assess the types of products involved, and review trends in bankruptcies. The paper concludes with a discussion of recent decisions.