There seems to be a developing trend in the filing of lawsuits from the Big Collapse. One example involves the same Goldman Sachs deal that was the focus of the Securities and Exchange Commission in its Complaint alleging Civil Securities Fraud. You are probably aware that one of Goldman's public 'defenses' is that the deal involved "sophisticated investors," so no harm, no foul. One of the supposedly sophisticated investors dealing with Goldman Sachs was a German Bank, IKB.
However, it turns out that one of the investors -- IKB -- allegedly acted on behalf of others, investing the money of others, anticipating a probable return on investment for the others, but certainly charging a definite fee for the service. It is not often that the Courts have defined what a "fiduciary" is, but any judicial definition definitely includes acting on behalf of others with powers delegated by others for the benefit of those 'others'. See, e.g., Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith ยงยง 3.26-3.30 (Second Edition Thomson Reuters West; 2010 Supplement in process).
The "others" in this case allegedly included King County in Washington State, which as a result of many such deals gone bad -- for persons situated like King County -- announced layoffs of police officers and district attorneys, and reductions in services provided by the county library among other things. King County reportedly sued for fraud. IKB, the German Bank that invested its money in such deals, and three Credit Raters are the Defendants. Nathaniel Popper, "Goldman Sachs Deal in Fraud Case Involved Unsophisticated Investors" (Los Angeles Times Online, Wednesday, April 28, 2010).
In another, unrelated example, MBIA Insurance reportedly has claimed "Fraud" on the part of Countrywide Financial-Bank of America "in obtaining insurance on billions of dollars of mortgage-backed securities". Patricia Hurtado, "MBIA's Fraud Claim Against Countrywide Can Proceed (Update 2)" (Bloomberg.com, Friday, April 30, 2010). Again, it seems likely that Breach of Fiduciary Duties may also have been alleged based upon the accepted judicial definition of "Fiduciary" in this country. See Wall, Litigation and Prevention of Insurer Bad Faith, supra.
The King County lawsuit may be easier to locate than the MBIA lawsuit, as the King County lawsuit was reportedly filed in U.S. District Court whereas the MBIA lawsuit is reportedly pending in New York State Supreme Court. Further research including the Internet appears warranted, and when the Complaints and significant Orders have been located, they will be addressed here.
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