SLG currently is investigating losses in collateralized debt obligations (CDOs) which may have resulted from the negligence of underwriters, investment banks or rating agencies that brought these products to market.

The decline in value of CDOs and mortgage backed bonds was the primary trigger for the 2008 freeze in credit markets and ensuing financial crisis. Banks and insurance companies earned hundreds of millions of dollars writing credit default swaps and other forms of "insurance" covering billions of dollars of mortgage-backed securities. When the underlying mortgages defaulted, these institutions, such as Lehman and AIG, did not have the cash to cover the liabilities they had assumed.

Congress is protecting Wall Street from losses related to the mortgage crisis, but there is no bailout for CDO and bond investors.

This is what investors should know:

• Purchasers of CDOs—school districts, municipalities, retirement funds, public agencies and high net worth investors—are now left with the mortgage meltdown losses.
• Moody's, S&P and Fitch already have acknowledged that the ratings given these products were inaccurate and gave a misleading impression of safety.
• The "insurance" protection for these investments may be largely uncollectible when the investments default.
• In many portfolios, the CDOs and bonds have not yet been marked down to reflect the defaults that have drained them of value
• For CDO investors, the major losses are just beginning to be reported.

Legal remedies are available to investors that were misled about the safety and liquidity of CDOs and other mortgage-backed securities. For more information, or to consult on a confidential basis, contact SLG at the phone number above or fill out our contact form.