I posted a writing on December 23rd, 2007 on "Fraud and Deception…" http://www.servias.org/?p=28. We are starting to see the sharks circling their prey in the derivative insurance arena of collateralized debt obligations (CDO’s) contracts :
Johnson & Perkinson Announces Commencement of Class Action Litigation Naming Ambac Financial Group, Inc.
Monday March 3, 4:32 pm ET
SOUTH BURLINGTON, Vt., March 3, 2008 (PRIME NEWSWIRE) — Johnson & Perkinson hereby announces the commencement of a class action lawsuit naming Ambac Financial Group, Inc. (“Ambac” or “the Company”). Individuals, families, trusts or other entities that purchased Ambac securities between October 19, 2005 and November 26, 2007, inclusive, have the opportunity to participate as Lead Plaintiffs in the currently pending litigation. To do so, you must apply to serve in that capacity by March 17, 2008.
Johnson & Perkinson, a litigation boutique law firm based in South Burlington, Vermont, has extensive experience prosecuting investor class actions and actions involving financial fraud. Attorneys Johnson and Perkinson are both former employees of the Securities and Exchange Commission. Dedicated to maximizing shareholder return, members of Johnson & Perkinson have prosecuted complex class actions alleging securities or consumer fraud/deception on behalf of investors/consumers against numerous public companies since 1985, resulting in the recovery of many hundreds of millions of dollars, and have been singled out for excellence by various courts. The firm is litigating, or has recently resolved litigation, as Lead or Co-Lead Counsel in securities class actions against Xerox, Priceline, Wireless Facilities, i2 and Xchange, and serves on the Executive Committee in the Global Crossing case. http://biz.yahoo.com/pz/080303/137505.html
This is just the beginning. On the mortgage-backed securities front, litigation is moving forth:
Swap Skirmish: Risks Hidden, Says Hedge Fund
By Susan Pulliam, Serena Ng and Tom McGinty
Word Count: 1,212 | Companies Featured in This Article: Citigroup, Wachovia, MBIA, Ambac Financial Group, Bear Stearns, Morgan Stanley, Goldman Sachs Group, Lehman Brothers Holdings
As financial markets boomed in recent years, some Wall Street players began selling insurance against things going wrong, in what looked like prudence.
It wasn’t.
In separate lawsuits filed in a New York federal court, a $58-million-asset hedge fund alleges that Citigroup Inc. and Wachovia Corp., respectively, improperly required the fund to pay out more money from insurance derivatives contracts known as "credit default swaps" amid a steep decline in the value of mortgage-backed bonds. More… http://online.wsj.com/article/SB120459196434709061.html
Most of us don’t understand the complexities of these financial instruments. The one thing we do understand- losing money. We can be assured that this is just the tip of the iceberg. The legal system will be extremely busy with the fallout of the greed-induced investing in these complex financial instruments. Do you remember in March of 2003 when Warren Buffett called the derivatives "financial weapons of mass destruction"? See http://news.bbc.co.uk/2/hi/business/2817995.stm
I hope you have implemented your "personal defense plan".