Hedge, Bond & Mutual Funds

Travis Pantin of the New York Sun reports that the number of class action lawsuits filed against Wall Street firms surged in the last year, fueled by the meltdown in the subprime mortgage market, according to new research published yesterday. There was a 43% jump in the number of securities fraud class action lawsuits last year to 166 suits -- 100 of which were filed after the mortgage crisis hit, the study by Stanford Law School and Cornerstone Research. To read full article click here.

Andrew Leckly of Tribune Media Services reports that stock of MBIA Inc. declined sharply in 2007. Although the giant bond guarantor has international growth prospects, don't count on them if it drops the ball in its own country. Moody's, Standard & Poor's and Fitch rating services have affirmed their AAA financial strength rating of MBIA, but also added an ominous "negative outlook." They'd previously assumed MBIA had been conservative in all business dealings. To read the full article click here.

Shefali Anand of the WSJ reports that as the credit crunch is starting to hit some bond mutual-fund investors in unexpected ways, some are now taking legal recourse for losses in their investments. In the most recent instance, an Indiana charity filed an arbitration complaint against Memphis, Tenn., broker-dealer Morgan Keegan & Co. unit of Regions Financial Corp., for an alleged misrepresentation in selling a bond mutual fund. The fund has lost nearly half of its value this year. The complaint comes on the heels of a lawsuit filed in a federal court in Manhattan in October over an institutional bond fund of State Street Corp., which alleged that the fund invested in “high risk” investments. A State Street spokeswoman has denied that the firm incorrectly communicated the investment objective of the fund. In its arbitration complaint, the Indiana Children’s Wish Fund says that it invested around $220,000 in the Regions Morgan Keegan Select Intermediate Bond Fund, on the understanding [...]