Australia Sues US Underwriter
As US borrowers continue to default and not payoff mortgage loans, many international markets are taking a beating as a result of US held securities. Bloomberg is reporting on the latest bad news:
Lehman Brothers Holdings Inc., the largest U.S. underwriter of mortgage-backed bonds, faces legal action by Australian municipal governments after the value of their subprime-related investments dropped as much as 86 percent.
Wingecarribee Shire Council, in the Southern Highlands in New South Wales state, is suing Lehman for “deceptive and misleading conduct” in selling A$3 million ($2.6 million) of subprime-linked collateralized debt obligations, the council’s managing director Mike Hyde said in a media statement today.
Given the array of errors made by lenders in the past few years, it should come as no surprise that many investors are upset at the nonsensical and illicit actions taken in the US.
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