Will CDO Managers Be Held Accountable For Their Role in the Financial Crisis?

In the wake of the financial crisis of 2008, the public became acutely aware of the existence of collateralized debt obligations (CDOs), bonds backed by pools of financial assets. While, these transactions had been around for over a decade, between 2004 and 2007 the volume of highly complex CDOs that repackaged or referenced mortgage-backed securities grew exponentially. ¹See e.g., SIFMA Global CDO Issuance and Outstanding tables, available at http://www.sifma.org/research/statistics.aspx. These deals arguably amplified the severity of the financial crisis, and as early as March 2008, lawyers and market participants expected billions of dollars in write-downs, as well as ...