July 13, 2007

Kevin Lacroix of D&O Diary nominates them as the flavor of the year in financial litigation:

The most obvious center of concern [as to legal risk exposure] are companies in the subprime lending and mortgage backed securities industries. But investors owning the subprime mortgage-related financial instruments also carry a significant risk profile. This investor group includes not only hedge funds (and hedge fund investors), insurance companies, pension funds (and pension fund beneficiaries), and commercial banks, but others whose balance sheets reflect significant asset values from mortgage backed securities. This latter group could include some surprising players, as many companies (for example, high tech companies) that have carried significant cash or cash investments on their balance sheets may have invested in mortgage-backed securities to boost returns.