There's no clear answer as to whether fraud litigation brought against Goldman Sachs by the U.S. Securities and Exchange Commission will fuel a new wave of credit crisis lawsuits, but insurance experts are sounding alarms about the possibility.
"We've all been waiting for the shoe to drop on SEC enforcement actions. We just didn't know whose head it was going to come down on," said Michael Young, a litigation partner with Willkie Farr & Gallagher in New York, who represents defendants in securities cases. "It looks like it's landed on Goldman Sachs," he added.
Mr. Young noted longtime speculation among securities litigation experts that "the SEC, much humbled by Madoff, [would] try to come roaring back," referring to the perception that the SEC did not do enough to react to warning signs of a Ponzi scheme orchestrated by Bernard Madoff.
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