Subprime Lawsuits Reverse Declining Litigation Trend

This year’s barrage of subprime-related lawsuits has reversed an 18-month decline in the number of shareholder class action lawsuits, according to research by NERA Economic Consulting.

  • 31 Dec 2007
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--Cathy Cunningham

This year’s barrage of subprime-related lawsuits has reversed an 18-month decline in the number of shareholder class action lawsuits, according to research by NERA Economic Consulting. Federal filings for 2007 are expected to total 207, 58% higher than last year’s 131 filings.

Last year no subprime-related class actions were filed. The filings picked up in the second half of the year; by Dec. 15, the total number of subprime mortgage lender shareholder class actions had more than quadrupled compared to the first half of 2007. As the subprime mortgage market continues to feel the pain into 2008, more litigation will likely follow, wrote analysts.

In addition to the increasing number of lawsuits, investor losses and the resulting average settlements have hit a new high. In 2007 the average settlement was $33.2 million, jumping up from $22.7 million in 2006.

  • 31 Dec 2007

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 4,755 19 11.75
2 Citi 4,288 14 10.60
3 Rabobank 2,633 4 6.51
4 Goldman Sachs 2,615 4 6.46
5 Barclays 2,603 8 6.43

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1 Bank of America Merrill Lynch 57,945.74 181 12.35%
2 Citi 57,243.86 174 12.20%
3 Wells Fargo Securities 48,214.86 152 10.28%
4 JPMorgan 33,301.70 114 7.10%
5 Credit Suisse 25,010.27 80 5.33%