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Old 16.09.2008, 13:44
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Dude, where's the lawsuits? [Financial crisis]

As we race past over $500 billion in write-offs, and some 50,000 jobs lost, I begin to wonder .... Dude, where's the lawsuits???

Surely, in the land of the free, where some one has to pay if I slip on the sidewalk, there must be somebody who can be sued for this abominable mess ..!

But seriously, there have been scores of reports about shady accounting practices, and conflicts of interest, and restatements of earnings galore (AIG, Fannie, Freddie, Countrywide .. etc etc) in the last two years. The regulators have been sleeping at the wheel, Chairmen have been playing bridge while the company went belly up (Jimmy Cayne at Bear), CEOs have been dancing well after the music stopped playing (Chuck Prince at Citi), Congressmen have been caught with their hands in the cookie jar (taking low interest loans from Countrywide)... and yet... not one of these guys has been jailed !! What's going on??

The American voters are worrying about Palin's daughter's pregnancy - frankly, who cares if she mates with monkeys? Does it remotely matter what she thinks about abortion? or if Obama is really a Muslim or a Christian?

The economy is in the gutter ... an entire generation's savings have been wiped out. Why aren't the American voters not pressing for answers? for jail terms for the people who made this mess? for clawing back severance packages of failed CEOs? for change in regulation? for stopping the drain of taxpayer dollars to save the casinos???
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Old 16.09.2008, 13:53
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Re: Dude, where's the lawsuits???

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As we race past over $500 billion in write-offs, and some 50,000 jobs lost, I begin to wonder .... Dude, where's the lawsuits???
Since all the companies you mentioned are broke, I guess the lawyers don't see any $ in it?
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Old 16.09.2008, 14:07
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Re: Dude, where's the lawsuits? [Financial crisis]

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What's going on??

The American voters are worrying about Palin's daughter's pregnancy - frankly, who cares if she mates with monkeys? Does it remotely matter what she thinks about abortion? or if Obama is really a Muslim or a Christian?

The economy is in the gutter ... an entire generation's savings have been wiped out. Why aren't the American voters not pressing for answers? for jail terms for the people who made this mess? for clawing back severance packages of failed CEOs? for change in regulation? for stopping the drain of taxpayer dollars to save the casinos???
I think that you nailed the answer on the head. The media feeds us news on pregnancies and crap to the pop culture society that the US had become. I bet if you polled people 20-40 when the last time they watched real news was (not MTV news, or Entertainment tonight, or even Fox news for that matter. I'm talking real as in BBC.) you will be disgusted. And even if they did watch the news, it's all propaganda and biased news.

And the lawsuits. Do we really need more? Living in a country with very little "stupid" lawsuits now I realize how ridiculous it is back home. No one wants to take responsiblilty for their own actions. Just let the CEO's go to jail.
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Old 16.09.2008, 14:12
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Re: Dude, where's the lawsuits? [Financial crisis]

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As we race past over $500 billion in write-offs, and some 50,000 jobs lost, I begin to wonder .... Dude, where's the lawsuits???

Surely, in the land of the free, where some one has to pay if I slip on the sidewalk, there must be somebody who can be sued for this abominable mess ..!
Great question. What gives me a bad feeling about this situation is that these types of lawyers usually file the class action lawsuit first and then ask questions. I haven't see nor heard of any of these suits filed.

Could it be that this type of lawyers have found their ethics and/or conscience?

Al
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Old 16.09.2008, 14:32
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Re: Dude, where's the lawsuits? [Financial crisis]

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Great question. What gives me a bad feeling about this situation is that these types of lawyers usually file the class action lawsuit first and then ask questions. I haven't see nor heard of any of these suits filed.

Could it be that this type of lawyers have found their ethics and/or conscience?

Al
No, it seems not.

http://latimesblogs.latimes.com/mone...edit-cris.html
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Old 16.09.2008, 15:00
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Re: Dude, where's the lawsuits???

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Since all the companies you mentioned are broke, I guess the lawyers don't see any $ in it?
The litigators file on behalf of shareholders and creditors and employees - all of who have been hurt - financially or otherwise, by the reckless and criminal actions of the company and its management. they collect from the damages paid by the company if guilt is proven.

second, bankruptcy does not mean there's nothing left to take ... Lehman had $ 639 BILLION in assets... those are probably worth some 350 billion in a distress sale, but that's not small change either.

finally, if you sue directors for malfeasance, their insurance company pays... so there's lots of sources where that money can come from
(unless their D&O insurance was provided by AIG, and if you haven't filed by this weekend, THEN you are up sh1tcreek without a paddle )

Last edited by dino; 16.09.2008 at 15:05. Reason: ****creek is not an English word !
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Old 16.09.2008, 15:04
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Re: Dude, where's the lawsuits? [Financial crisis]

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Great question. What gives me a bad feeling about this situation is that these types of lawyers usually file the class action lawsuit first and then ask questions. I haven't see nor heard of any of these suits filed.

Could it be that this type of lawyers have found their ethics and/or conscience?

Al
I seriously doubt that
Oh God, that will be the day !

Frankly, in this situation, I think there are too many powerful people who were on the take, in one way or another. If half of Congress was on the payroll of the financiers, who's going to cast the first stone ???
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Old 16.09.2008, 23:05
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Re: Dude, where's the lawsuits? [Financial crisis]

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second, bankruptcy does not mean there's nothing left to take ... Lehman had $ 639 BILLION in assets... those are probably worth some 350 billion in a distress sale, but that's not small change either.
There is no way that Lehman's assets were worth half their face value. Maybe 10%, maybe 5%, see Roubini's latest Youtube. In fact one of the problems is that no-one knows what they are worth, not even Shorrick. Untangling the web woven by the quants is almost impossible. So to be on the safe side assume it's worth nothing.... On the other hand, apparently Barclays is up for some juicy pickings, so there must be a few good bits left.
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Old 16.09.2008, 23:31
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Re: Dude, where's the lawsuits???

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second, bankruptcy does not mean there's nothing left to take ... Lehman had $ 639 BILLION in assets... those are probably worth some 350 billion in a distress sale, but that's not small change either.
You have a point here but just look at the problem. Out of 639 billions, if the assets are worth 350 B still they have to book a loss of close to 300b. They don't have that kind of capital base. So the company is worth Zero or -ve and they why probably no one took it over.

In my opinion the basic problem is more to do with the compliance and the federal reserve board. How the hell on the earth they allowed LB or others to leverage up to 20-30 times first and then have portfolio in the subprime classes and other risky investment.

They should realize that some of these banks were deploying and advising for large number of institutions around in world. Some in sensitive sectors like Insurance, Pension etc.

Its a shame that some created a system to suck the money easily from around the world too much and too fast and no one was around to watch the participants. There is a foul play at every end insurers, rating agency, distribution etc. In earlier days (may be 5-7 years back) it was also called as new age banking, innovative products (CDOs etc) and all the europeans banks jumped onto it and some very late like UBS thinking they will miss the boat.

Let us see what happens next..
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Old 17.09.2008, 05:49
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Re: Dude, where's the lawsuits???

If a bank had stayed away from these products and remained sensible, then there would not have been the huge profits "in the olden days".

I'm fairly sure those very same shareholders (and lawyers) would be demanding new management or compensation because the bank would be underperforming its rivals...
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Old 17.09.2008, 09:20
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Re: Dude, where's the lawsuits???

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If a bank had stayed away from these products and remained sensible, then there would not have been the huge profits "in the olden days".

I'm fairly sure those very same shareholders (and lawyers) would be demanding new management or compensation because the bank would be underperforming its rivals...

yes shareholders complain .. that's part of the job description

but can you find an example where companies went bankrupt or thousands lost their jobs because a bank earned 1% less than their peers???
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Old 17.09.2008, 09:54
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Re: Dude, where's the lawsuits???

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The litigators file on behalf of shareholders and creditors and employees - all of who have been hurt - financially or otherwise, by the reckless and criminal actions of the company and its management. they collect from the damages paid by the company if guilt is proven.
You can sue the company all you want, but once creditors are paid off, shareholders (luck helping) partly paid off, there'd be nothing left to pay the damages with.

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finally, if you sue directors for malfeasance, their insurance company pays... so there's lots of sources where that money can come from
(unless their D&O insurance was provided by AIG, and if you haven't filed by this weekend, THEN you are up sh1tcreek without a paddle )
Demonstrating criminal malfeasance is going to be a (very) long call.
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Old 17.09.2008, 10:00
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Re: Dude, where's the lawsuits? [Financial crisis]

Is there any correlation between the culling of a couple our regulars since the credit crisis or is that just a coincidence?
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Old 17.09.2008, 10:49
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Re: Dude, where's the lawsuits???

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You can sue the company all you want, but once creditors are paid off, shareholders (luck helping) partly paid off, there'd be nothing left to pay the damages with.
true enough... but sending a few big boys to jail every now and then is incredibly helpful for the system's hygiene ...

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Demonstrating criminal malfeasance is going to be a (very) long call.
of course it's not easily done.
but it has been done often enough to prove that it can be done.

Dennis Kozlowski and Mark Schwartz, Tyco
Reyes, Brocade Communications
Tone Grant, Refco
John Rigas, Adelphia
Bernie Ebbers, Worldcom
Nick Leeson, Barings
ENRON!

need more ??
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Old 17.09.2008, 10:55
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Re: Dude, where's the lawsuits???

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true enough... but sending a few big boys to jail every now and then is incredibly helpful for the system's hygiene ...
...whose upkeep you indirectly have to pay for through your taxes...
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Old 17.09.2008, 11:56
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Re: Dude, where's the lawsuits???

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Dennis Kozlowski and Mark Schwartz, Tyco
Reyes, Brocade Communications
Tone Grant, Refco
John Rigas, Adelphia
Bernie Ebbers, Worldcom
Nick Leeson, Barings
ENRON!

need more ??
As you know, most of those involved design, implementation and execution of a stealth deceptive system from the outset.
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Old 17.09.2008, 13:27
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Re: Dude, where's the lawsuits???

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As you know, most of those involved design, implementation and execution of a stealth deceptive system from the outset.

Kozlowski didn't have a system... he just dipped into the cookie jar every time he passed by

"what do you mean that's the company's money? I AM the company.."

in any case, I assure you the lawsuits are coming... by the truckload. the system just hasn't had enough time to get its act together.
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Old 17.09.2008, 14:37
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Re: Dude, where's the lawsuits???

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...

In my opinion the basic problem is more to do with the compliance and the federal reserve board. How the hell on the earth they allowed LB or others to leverage up to 20-30 times first and then have portfolio in the subprime classes and other risky investment.
Because if you graduated in mathematics / statistics and you knew your sh*t you'd end up working on Wall street for a salary multiple of a comparable gov't job, where you would have been at the bottom of the ladder.

The regulators were much slower than the financial élite ... they didn't stand a chance, poor souls, and the rest of the world, well, the proof is in the pudding.

an interesting anecdote with regards to a private bank in Lugano, which used to belong to UBS.
When CDOs first appeared on the market, someone from UBS went to this bank's treasury dep't and told them not to touch the stuff - proibito, verboten, understand? LOL - talk about double standards !!

Paul
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Old 17.09.2008, 14:43
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Re: Dude, where's the lawsuits? [Financial crisis]

Proving criminal acts is usually beyond reasonable doubt and implies intent or planning.
Hard to do here

This is simple greed, mostly.

In that case, you could sue 419 victims and anybody sucked into a pyramid scheme...
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Old 17.09.2008, 14:55
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Re: Dude, where's the lawsuits? [Financial crisis]

What about the rating agencies?
Giving AAA rating for bonds underlined by sub-prime mortgages must border on criminal.
It's not much better than someone selling you a glued together write-off car saying that it has the top safety rating.
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