- The SEC just let Wells Fargo off the hook for its sales of mortgage securities, meaning that not every bank is being sent to the firing squad for these products.
- Kevin LeCroix reviews the legal theories plaintiffs may assert in civil litigation against the banks that packaged and sold the MBS before the crisis.
- As does this nice law firm memo.
These sorts of suits should be the heart of the way that the financial crisis finds itself subject to resolution in the courts - if it was indeed these toxic securities were sold under false representations taken about the care with which they were selected that caused the crisis. It's a contest between "buyer beware" and "seller be truthful," and it looks like the courts are quite willing to entertain the claims by private litigants, even as agencies have only sanctioned a few institutions for their conduct in the area. Stay tuned.
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