Who will hold the left-wing media (a/k/a the mainstream media) accountable for its lies?

Uh, yeah, 2, the media isn't reporting about lawyers' role in the financial crisis because it is too "left-wing".

Do you young-Republican types even know how stupid you sound?

I want to have babies.

-Loretta

Elie = average American citizen.

This would never happen at HK Miami.

Or maybe, just maybe, too few lawyers (and lawyer bloggers) can wrap their head around how mechanical and unsubstantive their role is in these things?

Loretta, might I suggest eating a Nutri-Grain bar?

http://www.youtube.com/watch?v=Y6rE0EakhG8

You down wit CWT....

Yeah you know me!

Lawyers proofread the loan documents and made sure all the clauses are retained from the precedent document and numbered correctly. It's the bankers who have to explain the meaning of tranches and enhancements to their lawyers, since law school doesn't really teach you these things, no?
Maybe the world is aware of the little value added by corporate lawyers, who are generally wannabe bankers who couldn't cut it or are too risk averse.
Tax lawyers might be value-added though.

7 - You mean mechanical and unsubstantive in generating the greatest leap in biglaw profits ever during the period from 2002 to 2007?

8, my friends don't support me.

http://www.youtube.com/watch?v=cOc2dwNWs8E

-Loretta

Lawyers just gave advice on what was legal and how to construct the instruments that the banks wanted. . . . As much as it pains me to say this, I don't think the lawyers are really at fault other than doing what their clown clients wanted them to do

WLRK screwed up big time. Whether the bonus was material enough that warranted disclosure was a legal question. Obviously, WLRK's overly aggressive strategy cost BOA $33 million.

14

I hope you're being facitious, otherwise you're a dolt. 33MM is nothing in the grand scheme of things.

No securities lawyers here today, it seems.

"Relatively speaking, only a small sector of society understands that Biglaw firms played a significant role making "toxic assets" lucrative and legal."

You don't understand what "toxic assets" are, do you?

7 & 10. Very few comments surprise me anymore, but I have to say I'm shocked that you two have such a simplistic view of what high end corporate attorneys do. Maybe you guys are right for the first few years of a lawyer's practice, but the partners at these law firms are doing a lot more than unsubstantive proofreading.

13 makes a much more credible point. But isn't constructing the instruments a fairly crucial part of bringing them to market?

There are a lot of things that the bank wanted. Some (bad) lawyers said "you can't do that." Other (good) attorneys said "I'll figure out how to make that happen." Now that it has all come crashing down ... I'm just saying that a little investigative journalism into what precisely lawyers did to make it easier for banks to make these gambles -- gambles that the taxpayers are now on the hook for -- wouldn't be the worst thing in the world.

Or should the MSM go back to bitching that Goldman actually made money?

Now if you'll excuse me, I'm sure somewhere a law student has just hit "reply all" when he shouldn't have and the readers need to know about it.
--Elie

Bankers are usually ADD folks with bad grades from law school, and mean excel skillz.

Can't be on time, can't do much but shine cufflinks and say "incremental" every other f---ing word.

15 - I agree. Also no lawyers on this post who do anything substantive other than being document jockeys.

What's your point? Summary execution of every partner or associate who worked on a CDO?

Tax attorney here. This is an earlier post in response to the post regarding baby boomers calling our generation lazy and self-entitled.

Here is my message to the baby boomer partners: thanks for your shitty business model, thanks for being too stupid to realize that the projects you were working on (i.e. financial products) were risky and dangerous for our economy (I'll throw in the baby boomers on Wall Street as culprits). Thank you for your greed and recklessness.

Hey, Ivan Boesky and Michael Milken are out of prison, I bet they are willing to pay exorbitant fees to help them cheat investors and send our economy into a disastrous financial downfall. Time to schedule a martini lunch and steak dinner. You'll get paid, then you can maybe get a referral fee from a defense attorney that specializes in securities fraud and RICO. Shit, I need to get offline and make some phone calls before you steal my idea.

Honestly, you fucking idiot egomaniacal baby boomer Gordon Gekko wannabees played a good hand in the current state of the economy.

Attention law firm managers: change your business model, it doesn't work. Take a salary cut so you don't ruin the professional lives of our generation of attorneys. We want to work, but your generation has ruined it for us.

Tax lawyers actually do find ways to save companies money. The rest of you can suck it.

Please name the five worst BigLaw managing partners of the last decade.

23, yes we do, but we don't have to do it in a Jenkins & Gilchrist way.

Coming from someone that lost their job for refusing to write tax opinions for bullshit transactions, the partners only saw the dollar signs.

There is no doubt in my mind that the corporate/securities/tax partners at the big firms knew and understood what they were doing when they were working on the plethora of financial products and investments that sent our economy into a downward spiral.

They saw dollar signs and fucked America. Thanks!

the Times is concerned about potential good samaritan liability that might arise from reporting on the role of law firms in the financial crisis.

As we all know, anything that might attract the attention of the authorities to the deeds of another is a prima facie violation of the good samaritan statute. If any of these lawyers aren't white, the SEC will predictably overreact and ship them to Guantanamo.

"13 makes a much more credible point. But isn't constructing the instruments a fairly crucial part of bringing them to market?"

No, it's not, really. These instruments were form instruments. You are grossly overestimating the complexity of creating them. "Bringing them to market" was rote, as was creating them, marketing them, trading them, etc.

"There are a lot of things that the bank wanted. Some (bad) lawyers said "you can't do that." Other (good) attorneys said "I'll figure out how to make that happen." Now that it has all come crashing down ... I'm just saying that a little investigative journalism into what precisely lawyers did to make it easier for banks to make these gambles -- gambles that the taxpayers are now on the hook for -- wouldn't be the worst thing in the world.""

I think that you're trying to put your worldview onto something you don't really understand. It's a little unclear what you're trying to say here, but I think that your references to "toxic assets" reflects that you are talking about securitization and products like CDOs. Your analysis reflects a basic misunderstanding of securitization and collaterialized debt obligations (CDOs) in general.

The vast majority of CDOs were neither novel nor anywhere close to the line of what was legal - there might have been a time when certain aspects of securitization were somewhat questionable, but it's long been resolved. Securitization is not about taking "illegal" assets and making them legal or something - it's about taking many promises to pay (like mortages) and packaging them into securities which can then be sold. The problems arose when the level and extent of packaging and resale caused the holders of the assets to fundamentally miscalculate the value of these assets. They assumed that, even if there were bad assets within those wrappers, they would always be able to resell them. There were a lot of false assumptions about the value of the underlying assets, the ability to resell the securities, etc., etc., etc. EVERYONE (except for a few who got fabulously wealthy) incorrectly valued these assets. They are now "toxic" because they are worth very little but are held within layers and layers of assets which obfuscate their nature - like toxic waste buried somewhere which is very bad but not readily apparent.

Except for some extreme outlying activity (which was itself fraudulent), there's not necessarily anything about securitization which is untoward - it's served as a very efficient tool in order to drive down the costs associated with the creation and maintenance of the underlying assets and obligations.

When you say "Some (bad) lawyers said "you can't do that." Other (good) attorneys said "I'll figure out how to make that happen."", I really don't know what you mean. You'd be laughed out of the room if you suggested to a client who wanted you to securitize something that "you can't do that." Do you think each of the 300 or howevermany lawyers at Cadwalader was a genius? No - most of them were just doing the same transactions hundreds of times over.

You could argue that securitization is an inherently flawed tool, in that it allows for too complete a divorce between the value of the underlying asset and the activity related to the markets in the resulting securities - if you feel that way, I think that you should turn towards regulation in order to address those sorts of systemic issues. To expect a lawyer to tell his or her finance institution client how to value assets and how to make decisions about holdings is simply naive as well.

Rakoff is pissed about compensation, corporate governance and reporting - that's an entirely different issue. It's primarily one of basist populist rage - again, I'm for a significant overhaul to these bodies of law as well. Again, while Herb and Marty may have pushed the envelope a little on that one, that's what they get paid the massive bucks to do.

Elie,

I highly dount that you can "wrap your head around" what caused the financial crisis, let alone string together succesive cogent sentences.

WachTTTell, LipTTTon, Rosen & KaTTTz

Listen up Elie.

We live in a corporate world of laws and regulations. And those laws and regulations have to be interpreted by erudite people with the ability to astutely analyze complex relationships and synthesize reams of information – but even more elementally basic and incredulous to you– effectively read and write.

Who's gonna do it? The Cowboy Bankers? Their asleep-at-the-switch Risk Managers and Credit Officers? Some blogger whose never done more than elementary diligence before bolting for less challenging pastures?

Corporate lawyers have a greater responsibility than you can possibly fathom. Bankers weep for the points shaved off their precious profit margins and they curse the lawyers. They have that luxury. They have the luxury of not knowing what we know: that our fees, while exorbitant, and the loquacious product of our intellect, while impenetrable to them (and the MSM), create certainty and diminish risks.

Furthermore, our existence and due diligence, our inability to expedite their transactions without interminable delays, while grotesque and incomprehensible to them, are all that indemnifies the Cowboy Bankers and all of their buddies on The Street from being jointly and severally bankrupted, sued, fined and/or incarcerated for the cornucopia of obscene risks they recklessly generate every day...

BofA didn’t want to know about the bonuses. Because deep down, in places i-bankers don't talk about at their bacchanalian “capital introduction” events, they want us on their calls…They need us on their calls!

We use words like “heretofore,” “whereas,” and “for the avoidance of doubt,”...we use these words as the backbone to a life spent obfuscating something.

They use 'em as a punch line.

I have neither the time, nor the inclination, to spend any fraction of an unbillable hour explaining the intricacies of corporate law to the bankers who rise and sleep under the blanket of the very freedom from liability that we provide, then question the garrulous manner in which we provide it and/or dime us out to the judge! Personally, I'd rather they just said thank you and went on their way.

Otherwise, I suggest they have you, Elie, pick up a treatise and draft a Material Adverse Change clause.

Either way, I don't give a damn what you think you're entitled to!

Brilliant post, 30!

@27 & 30. That was pretty good. Thanks.

I think that 30 has become my new favorite schtick. Keep it up, Truth.

27. I'm not saying that lawyers did anything illegal (except for, as you put it, a few outliers who committed fraud).

The banks (for the most part) didn't do anything illegal either. Neither did AIG.

But just because it was legal hasn't tempered the public outrage at the banks. You could (and I would) argue whether that "outrage" is correctly placed or helpful. But what occurs to me is that the outrage has been *solely* focused on "Wall Street Banks" and the few fraudsters.

Well, as long as we are having public outrage, why are lawyers getting off the hook? You're arguing that they are off the radar because lawyers did nothing wrong. Well, technically, neither did bankers. I'm not making a moral argument or imposing a worldview. I'm just surprised that the public isn't all juiced up on a "down with lawyers" rant. I suspect this is because of two things

A) Law firms didn't take public money
B) MSM doesn't understand what lawyers do.

Well, one issue with A is that these law firm profits were possible because of the same "risky" products that ultimately got the banks in trouble. Nobody is talking about lawyers disgorging those profits, but Goldman can't make a bonus payment?

And the issue with B) is that far too many people think that all lawyers do is what 7 & 10 said -- and that is just not true. Capital market partners were very skilled and very creative and very important to the process of making these profits work.

Again, I'm not making a moral argument. It's just surprising to me that the media is focused on one part of a system and not another.
--Elie

That picture never gets old. Always makes me horny.

D. Lat

The Truth (30) = brilliant!

30. That made me laugh. I don't know why the hate is directed to me though, much like I will still never know what the hell Lt. Weinberg did to get included in that speech.

Well done
--Elie

Former MBS lawyer here. I remember doing deals where the mortgages backing the bonds were 100% investor/second home with like 60+% stated income stated asset (i.e. the truck driver telling you he makes $250K and it is taken as gospel) or no doc and the weighted average LTV on the properties at like 90%, of which huge chunks of the loans were secured by properties in Florida, Nevada and everywhere else that went bust. This was clearly set forth in the offering document. It was up to the investors to realize that these loans are utter shit, therefore the bonds backed by them are utter shit.

24 - Heller Ehrman, Thelen, Jenkens & Gilchrist, Wolf Block, Thacher Proffitt -- all dissolved. There you probably have the 5 worst managing partners.

39 - I meant worst in terms of being lying, greedy scumbags, not necessarily in terms of firm performance. Sorry, I should have clarified.

- 24

28 - What is dount? If you're going to try to bust someone's chops you might want to proof your work. It lends some semblence of viability to your smack.

27, that wall of text, and all you proved was that you don't know what you're talking about. Guess that's par for the course here!

37 - Cause he's a weak, pencil pushing dweeb.

Really Elie !?!

You write a blog devoted to covering BigLaw and thought it was a good idea to imply that “what precisely lawyers did” on Wall Street should be investigated?

Really !?!

You figured we’d appreciate your support of some trumped up witch hunt?

Really !?!

You spent last night downing cocktails on the roof of the Empire Hotel, paid for by a corporation whose revenues are derived from the very people who you now suggest may be worthy of judicial scrutiny, and you wonder why the anger is directed at you?

Who pays your bills (and bar tab) son?

Really?

Really, what the hell is that?

I did my job, I'd do it again.

Now, you’re going to say that maybe I should be charged with a crime?

Me - charged with a crime?

That is funny, that's what that is!

You f-cking people have no idea how to defend an industry.

All you did was weaken an industry Elie!

You put associates’ jobs in danger.

Sweet dreams, son.

Elie, 27 here, you're right, but if you knew the answer, why did you ask the question?

Of course, the reason neither the public nor mainstream media is raising pitchforks against large law firms is because large law firms have not been bailed out by the government. I would think that would be obvious.

To me, it's more interesting to dive deeper and understand WHY large law firms haven't been bailed out.

It's because choosing not to do so and letting them fail has no great consequence - a few thousand people at most lose their jobs, many of them would be able to find something relatively soon anyway, clients still get served and the business of law would march forward. Law in general is not going to fail. Large law firm failures aren't going to lead to any unacceptable outcome. The same is not true for a failure of a Citibank or a Wachovia. The Federal Reserve and the government are rightfully worried about the consequences of such failures in ways that they are not worried about law firms failing.

The fact that the public doesn't understand what law firms do is of no consequence. Do you think the public understands what investment banks do? No - they're pissed that those entities are getting public money, and they don't understand why and how. And then they hear that these entities employ people who are getting paid metric assloads of money - of course they are pissed.

The public's rage is not necessarily motivated by things that are wrong - no one really cares that much about stuff that doesn't affect them - it's motivated by the fact that they think that "their" tax dollars are going to pay the exorbitant salaries of those banks. The public can follow the stream of fungible public money to the banks and to the pockets of bank executives, but they don't interpret the procurement of goods and services by these entities to be outrageous unless these goods or services are inherently outrageous or salacious. Think call girls and private jets, not legal services.

Wow. 30 needs to be its own blog thread. Please post as a main-page story. We can all just read it and laugh. And please link it to Dealbreaker, too. Those guys deserve it.

"I don't know why the hate is directed to me though"

Elie, 27/46 here again, I guess this is commenting day for me, so I've got this one too: It is because this blog was a fabulous resource and very well-written and funny, and, to put it mildly, you have not upheld that standard. You dismiss valid criticism as illegitimate, and fall far to easily to the crutches of racism and prejudice in a manner offensive to actual sufferers of such bigotry. It is because you are far too inexperienced and uninformed to display the kind of disdain that you do for practicing lawyers, even partners at large law firms who do and say questionable things. Your "I was one of you" cred is questionable and, even if accurate, limited. It is because your refusal to attend to detail reflects an unwillingness to take pride in your work, which is stark in contrast to your willingness to take pride in where you attended law school. It because the pleasure you so obviously take in the misfortune or malfeasance of others is a profoundly ugly character flaw.

You can do better that this, and if you can't you should find something else to do. This blog and its readers deserve better, especially in a difficult time for law students and associates. In short, we show disdain for you because you have ridiculed, insulted and underestimated us, your readers, time and time again.

I worked on quite a few deals of the nature that Elie describes in this post and there's certainly plenty of blame to be put on the lawyers. However, the NY Times and the rest of the mainstream media are without any credibility. If the bar associations of the various states or the SEC or FINRA or some other regulatory body wants to investigate, fine. But the mainstream media would add absolutely no value to the issue and would likely just spin it into some sort of political witchhunt, much like Elie spins everything into a race based rant.

Elie

13 here

Unless I missed it in your bio you have never been in banking or trading. To create a security all you have to do is essentially lay out all of the terms in good faith. The lawyers did this and made sure all of the laws were followed (i's dotted t's crossed).

Traders said hey can we create something like this and the lawyers would bounce back with yes or no and then create the security (sometimes becasue a customer of the bank wanted a security with xyz features).

The real problem came not from anything the lawyers did. The problems were risk management and valuation modeling of the products created (including the rating agencies). I had a Bear CDO salesmen spend an hour trying to convince me that his product was superior to the rest on the street (mainly the yield). It was boilerplate when you read the offering document and the yield was superior, but only becasue they had garbage underlying it. That was the true problem, shitty loans made because of a) too loose a monetary policy and b) a governement push to ease credit standards so that loans went to people who couldn't pay them back.

Trust me Elie, I hate BigLaw and the entitled sniveling snobs and douches it produces, but you have to believe me on this one, the lawyers had zip, zilch, zero culpability in the whole mess.

-13

46. Again, I basically agree with you. But one would think (and hope) that the MSM would do a little more than stoke the public's anger.

The fact that "the public" doesn't understand what banks do (or what law firms do) is of extreme consequence. That lack of understanding directly leads to bad policy (exhibit A: I give you the United States Congress -- there are maybe 10 Congresspeople that have even a rudimentary understanding of what is going on).

Asking questions usually leads to good things. All I'm suggesting is that the MSM should be asking more questions. Isn't that what journalists are supposed to do? Why is there so much resistance to this concept?
--Elie

30

Well played sir, well played. As good or better than the one about traders from a few years back.

Elie: respond to 48.

You nimrods crack me up. You've managed to get your knickers so twisted (along with your thoughts) that somehow Elie is at fault for bringing up the obvious.

The lawyers who advised these firms did a crap job. Deal with it.

54

How did they do a crap job? Last time I checked it was the trader's job to manage financial risk, not the lawyer. Most lawyers don't even know what Monte Carlo simulations or VaR is, much less how to calculate it.

-13

"Isn't that what journalists are supposed to do? Why is there so much resistance to this concept?"

The "mainstream media" is such a stupid concept; I hate that the entire country uses what was essentially a conservative slur created by Rush Fucking Limbaugh to whine about his irrelevance. There is no mainstream media. There is a greater variety of media now than ever in the history of time. Now there is more - look, another blog just started. And another one.

Don't blame someone else if you are displeased with the nature of journalism. The economics have changed - they have incentives to pander to fools. Don't waste your time complaining - you have quite a soapbox - use it. Go home tonight, and work hard on a great article looking at whether and how lawyers should tell their clients what they are doing is wrong. There are a lot of angles to play here. Have your wife and someone else read it first. Make some edits, spell check it. Then come in tomorrow and show us that the readers were right to pick you over Marin.

30 was overrated. How many parodies of that speech can you read and still enjoy them?

56 is hilarious. 56 thinks that this site consists of something more than Elie cutting and pasting the work of other people and then adding in a few spelling errors and racial rants to call it his own...or Kash penning some puff piece or unsubstantiated (and untrue) rumor and waiting for people to fawn over her for not being hideously ugly.

>>Asking questions usually leads to good things. All I'm suggesting is that the MSM should be asking more questions. Isn't that what journalists are supposed to do? Why is there so much resistance to this concept?

For approximately the same reason that you don't often see ABC News skewering Disney because Carnival Cruise lines allegedly dumped a truckload of sewage in the ocean, or NBC going after GE for whatever;Journalists are not [always] stupid - they know what side their bread is buttered on, and they know that asking questions (at least in the US) tends to make the askee both clam up and commit the asker's name to memory - to be screwed when and if the opportunity arises.

While journalists, I'm sure, often want to ask tough questions, the golden rule is that he who has the gold, makes the rules, and there is a fine line between the desire to ask a question, and the advisability of doing so [at the risk of one's career and/or credibility].

My 2c

I don't get why so many people take pleasure in bashing Elie. It is a freakin' blog! Do you really need to call him stupid, fat, etc.? Does it make you feel better? Do you get excited when Elie posts because you have someone to take your frustrations out on?

The only point you people that pick on Elie are really making is that you are insecure and unhappy. Maybe you are a partner's punching bag?

Do grammatical errors in a blog warrant such hostility? Do you rant and scream at your subordinates for mistakes? I am guessing that you Elie haters are socially inept freaks and you probably suck to work with.

57 - way to contribute...

Its douchenozzles like you that have destroyed what used to be a witty blog.

Why don't you provide us with somthing funnier?

Or have you been a partner so long, that now all you can do is sit there and critique the activities of those around you that add value?

Elie, The bankers who originated and sold the mortgages DID do something wrong in that they very sloppily originated non-conforming loans that they knew they could off-load for securitization at a profit and therefore ignored whether the borrowers could afford the loans due to a misplaced belief that should the borrower fail to pay when the 3-5 year re-set kicked in, the mortgage holder would have rights to the ever-appreciating collateral. The bankers who packaged and traded the securities and CDOs DID do something wrong - they miscalculated the risk of the securities based on (1) an over-reliance on the structuring of the securities to allocate loss positions in line with the credit ratings of the securities and (2) a miscacluation as to the market for the ultimate collateral securing the mortgages, i.e., US housing stock. The bankers who sold the securities DID do something wrong in that they encouraged investors to chase yield without regard to the consequence of a collapse in the ultimate collateral. Each of these groups of people thought that someone else was taking care of the risks.

Lawyers just papered the trades such that the disclosure was accurate and the related contracts worked to allocate loss positions according to design. I have not seen anyone ever argue that the structures would have worked had the lawyers structured the documents differently. The inputs into the structures were the problem and the lawyers had absolutely nothing to do with those inputs. If you think lawyers tell bankers how financial risks are allocated, you don't understand what lawyers do.

The lawyers are liable in tort for securities fraud in that they material misrepresented the mortgage backed securities that they created as investment grade when really the securities were mere IOUs from deatbeat liars. The lawyers were obligated to do due diligence. They either failed to do that or merely ignored what they knew to be rampant fraud on the mortgage applications. At some point the lawyers had to draw a line and say that these MBS were packaged with so many bad loans that it was no longer possible to consider them an investment. This is very similar to Global Crossing where the company kept building fiber optic, leasing it to others and then buying it back. Investors were misled into thinking there was real not artifical demand. Remember Simpson Thacher had to pay $90 Million to settle that case. The Big Law Firms will have to pay up for their tort liability.

63, actually lawyers don't say a security is investment grade. Rating agencies do, and lawyers repeat it. That's why litigation on this very issue is already going on against ratings agencies, but law firms have emerged largely unscathed.

63 - see 64 - its the ratings agencies and their lazy incompetent negligent worker bees that should all be summarily court-martialed and hung form the tallest tree. Why this hadn't happend yet is a shame, and/or a testament to the lobbying power of theit government sanctioned oligopoly.

If you think we are the ones charged with the responsibility of examining the details of the uinderlying mortgages, then you've obviously never served in a forward area.

Please go back to the academy and leave the fighting to the grown-ups.

And 61 - you're a good soldier, and I applaud the accurate use of the term douchenozzle, but I'll fight my own battles.

@64 It's the lawyers' job to do due diligence. They didn't do and they participated in a fraudlent scheme to misrepresent securities as investment worthy when in reality the pension funds and other investors would have had better odds going to a casino. SOX mandates that lawyers have an independent duty to disclose fruad. They failed to do that. The only reason more law firms haven't gotten sued is that lawyers have professional courtesy -- sharks don't eat sharks.

@65 I am a litigator. I have sued many arrogant pricks like you who thought you could get away with it all. You lied cheated and stole. A jury of your peers that your nuts are nailed to the wall for it.

66, yes you're right, lawyers have never sued other lawyers for misbehavior where there are potentially millions of dollars in payoffs. Plaintiff's lawyers just love big firm corporate lawyers.

66

There was no fraud, that's the point. There was a bunch of stupidity and the only ones who can be accused of anything close to fraud are the rating agencies.

This entire concocted story is a precursor to Elie's thesis on how white people fucked up the country and how "people of the sun" are now entitled to run things. I have very little faith in Elie's grasp of the current financial situation.

@63, "The lawyers are liable in tort for securities fraud in that they material misrepresented the mortgage backed securities that they created as investment grade when really the securities were mere IOUs from deatbeat liars."

You have no idea how securities laws work, you don't understand what torts are, and you don't know what "due diligence" means, who does it or why. But thanks for contributing.

Wow...a litigator makes an inflammatory, declaratory and unsubstantiated allegation without knowledge, insight or context.

Knock me over with a pro se draft of an initial pleading...

63/67 - Please go back to drafting motions to delay, and rather than waitng for the day when tort reform legislation is drafted to exterminate you, please consider drawing your own line and pursuing a more productive career path than suing those who can, to provide for those who whine.

@71 Why did Simpson pay out $90 million in the Global Crossing case?
@69 Are you nuts? There have already been multiple govt. investigations and lawsuits in which fraud has been found -- fraud by the mortgage applicants, the mortgage brokers, the appraisers, the bankers and the lawyers. Why did Goldman pay a million dollar fine in the Mass AG case?

@66 - seriously? If you think that plaintiffs attorneys won't sue other lawyers especially when they're biglaw attorneys who can pay big judgments, you are so profoundly ignorant that I'm probably wasting my time here. I mean you have heard of malpractice insurance right? Or maybe not. In any event, it comes up for a reason.

I mean there was that lawsuit about the CMBS deal from the 1990s - against CWT. Lost track of that, though i imagine it's still ongoing. In any event it actually does happen regularly. You just need, you know, some facts to support it. Although since you seem to think the real issue is whether the securities were "investment worthy" (wtf does that even mean? It sounds like Wayne Cambell sitting next to Garth saying "Dude this investment is totally worthy!") or not is the issue that will decide the case I doubt that you're a securities litigation guru.

So I'll try again. Law suits are already proceeding on these issues against lots of parties. Most prominently banks and rating agencies. Believe it or not the plaintiffs did not forget to join the lawyers. They for damn sure didn't decline to do so out of professional courtesy. They didn't bother because they knew that it was a waste of time. You may not understand why, but that's okay. We can't all understand what the reporting up and noisy withdrawal rules of SOX mean.

@69 - in what recent case has there been a finding of fraud by lawyers - specifically, lawyers who particopated in RMBS/CMBS/CDO transactions? (Not lawyers who partiicpated in fraud in the origination of the underlying mortgage loans; there has been lots of that.)

75

You're talking to the wrong guy

69

the whole system is nuts.
at Biglaw I was required to do due diligence and review over 15,000 pages in three days and then sign an internal dd memo saying everything was ok

Anyone have contacts at WSJ? I would love a story on the front page regarding the role attorneys played in this disaster.

does anyone know how to jailbreak an iphone? at&t sucks

@ 77 Exactly my point. These law firms and investment banks were doing hundreds of deals involving several thousand mortgages. There was simply no time for anyone -- the ratings agencies, the banks or the lawfirms to do adequate due diligence. The lawyers had a duty to stop the deal and demand that the diligence was done. Their failure to do that consitutes an actionable tort.

@73, You really have absoilutely no idea what you're talking about. Simpson got in trouble for allegedly failing to properly do their job with regard to an investigation of some sort of accounting fraud. Learn what a due diligence investigation in connection with a securities offering is and why it is done. Once you understand that, you'll see why your point betrays complete ignorance of the law.

Viva Cuervo!!!! Arriba Arriba. La cucaracha La cucaracha......Viva Mexico

30 -- f'ing brilliant

Elie -- the reference to Lt. Weinberg was gratuitous anti-semitism designed to sway anyone who might actually be sympathetic to Col. Jessup.

I could watch that scene on a continuous loop.

MysTTTal

I knew lots of guys in high school who screwed up due diligence all the time. It was no big deal.

What about a Restatement Section 90 claim? Of course, it probably would be defeated by the "good samaritan" defense.

I wonder if Partner Emeritus is feeling some heat.

not sure if anyone is paying attention now but mid-level associate here who worked on those deals. the disclosure was accurate. in the "risk factors" section, it was all detailed - the less than creditworthy borrowers, the lack of documentation (of borrower's income), even the possibility of shocks to the broader economy. My guess is investors didn't bother to read the whole prospectus (supplement). they simply read the cover page, "AAA". meaning, the rating agencies blew it, and the genius "quants" or whoever at the I-banks missed it - if anything, the lawyers are least to blame and were most on top of the risks from the beginning - but those genius number crunchers at the I-banks never listened to us issue-spotters (who actually know how to think). they just ran their numbers based on faulty assumptions and got their desired rating. Elie - never criticized you before but next time please know WTF you're talking about before posting such bull.

"The Truth" is fucking badass. He's my new favorite commenter.

Excuse me?! ... I work at a bank in this area and happen to be a lawyer. This statement is entirely wrong, "Without attorneys, bankers wouldn't know their tranches from their enhancements."