Financial Services

The fastest growing area of litigation and counseling in the country during the past two years has been in the financial services industry. Munger, Tolles & Olson has been heavily involved, representing some of the most high-profile banks impacted by the current economic conditions, including Wells Fargo & Company, Citigroup Inc. and Bank of America. The firm has acted as a trusted advisor to these and other banks in navigating the legal actions arising out of the recent mortgage crisis.

Long before the collapse of Lehman Brothers, Munger Tolles had a history of providing counsel on the central issues involving Wall Street titans, from leading the investigation into the Salomon Brothers treasury auction scandal in 1991 to helping Merrill Lynch navigate the unprecedented bankruptcy of Orange County in 1994.

Our lawyers know how to manage the mind-numbing complexity of what appears at first to be an impenetrable situation. As financial institutions find themselves facing a raft of investigations and litigation stemming from their most complicated financial instruments, Munger Tolles provides an interdisciplinary team of litigators and corporate lawyers. Our attorneys again find themselves at the heart of some of the most important and precedent-setting litigation in this area.

Some highlights of our high-profile work in the financial services industry includes representing:

  • Bank of America in:
    • lawsuits filed by BNP Paribas and Deutsche Bank in New York and Florida seeking $1.7 billion in losses plaintiffs sustained as noteholders in Ocala Funding.
    • successfully resolving a $10 billion lawsuit brought by American International Group (AIG) claiming Bank of America and its Merrill Lynch and Countrywide Financial units misrepresented the quality of the mortgages placed in securities and sold to investors.
    • litigation filed against it by Ambac seeking to avoid its monoline insurance liability for mortgages originated and securitized by the bank.
    • litigation filed against it by U.S. Bank seeking repurchases of mortgages originated by the bank.
    • litigation filed against it by investors seeking to hold the bank liable for losses sustained in connection with pools of mortgages where the bank served as trustee.
  • Citigroup in:
    • its defense against “Dallas” star Larry Hagman, who alleged the company breached its fiduciary duty and contract. Munger Tolles attorneys argued that one of the arbitrators failed to disclose information during a FINRA proceeding. A Los Angeles Superior Court judge overturned the arbitration finding and a settlement was reached.
    • securing a complete defense verdict against claims of unfair competition brought by Oppenheimer & Co.
  • Merrill Lynch in numerous matters, including obtaining dismissal of a putative class action in U.S. District Court in Los Angeles seeking to invalidate compliance requirements that Merrill Lynch Financial Advisors and other employees traded securities internally.
  • The outside directors of IndyMac Bank’s MBS subsidiary, securing dismissals with prejudice of litigation involving the bank’s mortgage-backed securities.
  • Wells Fargo in:
    • all facets of Wells Fargo’s residential mortgage-backed securities (RMBS) exposure.
    • all class and individual litigation nationwide by institutional investors in Wells-sponsored RMBS. In the first of this generation of RMBS class actions to settle, Wells Fargo reached a $125 million settlement following claims that the bank made misrepresentations in connection with the sale of more than $35 billion in mortgage-backed securities certificates.
    • nationwide class, mass and individual actions involving claims by investors in more than $2 billion in notes of special purpose entities owned by Medical Capital Holdings. Medical Capital provided financing to health care providers by purchasing receivables and funded these activities by offering notes to qualified investors.