A flood of investor lawsuits has poured into courtrooms following the collapse of Lehman Brothers, the pending sale of Merrill Lynch to Bank of America, the government takeover of AIG and the failure of Washington Mutual.
Even before Lehman filed for bankruptcy, the biggest in US history, private lawsuits stemming from the financial crisis had exceeded the previous high watermark in the six years following the savings and loan crisis two decades ago, according to Navigant Consulting.
The complexity of the subprime mortgage market meltdown and the widespread market shock mean investors could face a more difficult road to navigate than during past periods of turmoil, lawyers say. For example, Lehman's bankruptcy, the announced deal for Merrill and the government takeover of other firms have put a temporary halt on some existing lawsuits.