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The Subprime Mortgage Crisis and D&O Insurance: A New Frontier of Litigation
The fallout from the virtual collapse of the subprime mortgage lending industry has just begun. Early estimates of subprime losses start at $100 billion and may rise to several times that amount. (Fin. Times, Nov. 6, 2007, at p. 18). As the various participants in the subprime market ' borrowers, originators, institutional investors, financial institutions, hedge funds, underwriters, warehouse lenders, insurers, corporate investors, and the list goes on and on ' continue to uncover the extent of their losses, the blame game among these participants is likely to be played out in courts across the country.
The targets of this litigation ' directors, officers, and the corporation itself ' will, more likely than not, have directors and officers' liability insurance. Whether a D&O policy will afford coverage for the litigation resulting from the collapse of the subprime mortgage lending industry is yet to be seen. As discussed below, there are several policy provisions that are likely to be relevant in the subprime context. Because coverage follows liability, an understanding of the potential coverage issues first requires an understanding of the claims themselves.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability
This article explores legal developments over the past year that may impact compliance officer personal liability.