The Meissner firm is currently investigating potential claims by investors relating to abuses in mortgage-linked investments by Morgan Stanley, Barclays PLC, and Credit Suisse Group AG. Such firms are currently also being investigated by FINRA and the Securities and Exchange Commission, which has sought information regarding the so-called synthetic collateralized debt obligations the firms created, focusing on issues regarding the banks’ conflicts of interests by betting that their own Collateralized Debt Obligations (CDOs) would lose value, the firms’ sales practices and on how they picked the mortgage bonds that underpinned the investments.
Collateralized Debt Obligations, are sophisticated financial tools that repackage individual loans, such as home-loan bonds, into series of products with varying risks that can be sold on the secondary market. Such products were the subject of the Securities and Exchange Commission’s recent investigation, and the record $550 million settlement of the SEC claims, related to investors who have been defrauded by Goldman Sachs and its failure to disclose to investors the role played by hedge fund Paulson & Co. in devising and betting against a mortgage- linked CDO known as Abacus.
The Meissner Firm is specifically investigating allegations that Morgan Stanley bet against a cluster of CDOs known as Baldwin; rather than reducing their bets, such were structured to keep wagering on mortgage bonds as the underlying loans were paid down. Morgan Stanley’s actions placed investors at risk of suffering losses on a modest rise in U.S. housing defaults, while Morgan Stanley put itself in a position to make gains. Morgan Stanley also designed other similar products, including one called ABSpoke. Credit Suisse and Barclays have also created synthetic CDOs linked to subprime loans, under series called Arlo and Magnolia. In addition, the Meissner Firm is investigating allegations relating to ICP Asset Management and its role of overseeing CDOs known as Triaxx, that the firm favored itself and certain clients by directing more than $1 billion of trades at artificially high prices on behalf of the CDOs.
If you were marketed or purchased any of the aforementioned products, or any other products which invested in Collateralized Debt Obligations, and believe you were misled or sold unsuitable products, please contact the Meissner firm, which is nationally known for its record win statistics in FINRA Arbitration, for a free consultation.
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