Subprime Mess Leads to a Mess of Class Actions
Investors’ class-action lawsuits are on the upswing, spurred by the subprime meltdown.
Seventy securities class-action lawsuits were filed in the first quarter of the year, almost equaling the number filed in double the time period last year, ERA Economic Consulting told Portfolio.com. Twenty-six of those suits are tied to subprime lending, and many of them target big Wall Street firms.
Among the 19 defendants targeted in the subprime class actions are Bear Stearns, JPMorgan Chase, Lehman Brothers and Morgan Stanley.
Gerald Silk, a partner with securities class-action firm Bernstein Litowitz Berger & Grossman, told Portfolio.com that he expects many more lawsuits. “My view is that we are still in the first half of the game,” he said.
ABAJournal.com previously noted the lawsuits filed against just one lender—Countrywide Financial Corp. They included class actions by investors who claimed the lender misled them about the quality of mortgage-backed securities and shareholders who claimed the company’s chief executive officer was overpaid.
