Subprime-related lawsuits are just now starting to hit. I pulled a snippet from an article about one. Thought it was right on the point. The quote I liked is highlighted:
"All large-scale financial scandals spawn mountains of litigation, but the sub-prime fiasco stands out because of the complexity of the system that funneled more than $1 trillion from investors around the world through Wall Street and mortgage lenders to borrowers with dicey credit.
As losses mount on those loans, the scene of the blame game is shifting to the courts.
Sub-prime borrowers are suing loan brokers and lenders, accusing them of deceptive practices. Wall Street firms that bought now-delinquent sub-prime loans are trying to force lenders to buy them back.
Investment-bank shareholders are going after those firms' managers, saying they took excessive risks by loading up on bonds backed by sub-prime mortgages. And investors are suing money managers whose sub-prime-laden funds have suffered hefty losses.
"Somebody described it to me as, 'Everybody's standing in a circle shooting at each other,' " said Kevin LaCroix, a lawyer who writes a blog on sub-prime litigation."