Industry Leaders Discuss What’s Next in Litigation and Regulation

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Washington, D.C. - November 19, 2008: Crowell & Moring LLP is conducting a three-part seminar series to address the fall-out and future of credit default swaps (CDS), the derivative instruments that have been blamed by some as one of the causes of the current financial crisis. The volatile CDS market is expected to prompt significant litigation as investors seek to recoup their losses, as well as attention from regulators who are likely to seek control over the market. The series will begin in New York with a Webinar on November 20 featuring insights from U.S. Bankruptcy Judge Robert E. Grossman and workout specialist John Ray of Avidity Partners, Chairman of Enron Creditors Recovery Corporation, among others.

"Although the CDS markets have been blamed by Warren Buffet as financial weapons of mass destruction, they may in fact be a scapegoat, and we need to look more closely at the product. CDS is a derivative product that to date has had no regulation or transparency. As we attempt to steer our way through the panic of the financial crisis, we must be careful that the regulations we put into place are the right ones, not merely placeholders. They have to buttress the strength of the industry, not regulation for its own sake," said Crowell & Moring partner William J. McSherry, Jr., who practices in the White Collar & Securities Litigation Group and will participate in the November 20 Webinar.

"Everyone is wondering if there is a next Lehman Brothers that hasn't been identified yet. This is an opaque market. No one even knows who their counterparty's counterparties are. There are untested and novel tax issues running around the CDS market, and there will be a variety of controversies unfolding after the planned clearinghouse is operational. On the regulation side, there will most certainly be legislation. Companies are concerned about disclosure obligation, requirements over registration, and transparency. They're also concerned about mechanisms for enforcement, like, mandatory arbitration and access to a forum different than a court," said Crowell & Moring partner Viva Hammer, a former Associate Tax Legislative Counsel at the US Department of Treasury.

Crowell & Moring is currently advising a number of global investment banks who are dealers in the CDS markets on the proposed formation of a CDS clearinghouse, which is to be created together with the IntercontinentalExchange, Inc. The firm advises clients on litigation, controversy and tax matters, as well as the regulatory and government relations issues pertaining to the CDS market and a variety of other financial services concerns.

Members of the press and public are invited to attend Crowell & Moring's three-part series featuring robust dialogue from industry thought leaders as follows:

The series begins with a Webinar on November 20, 2008, from 11:00am-12:30pm EST, on "Credit Default Swaps: Exploring the Controversy - Litigation and Bankruptcy." The panel will discuss the emerging credit default swap conflicts that are playing out in the federal, state and bankruptcy courts throughout the country. It will also explore the various regulatory bodies' involvement in the brewing controversies. Topics will include: applicable law and venues; judicial reactions and counterparty reactions; bankruptcy issues: lessons from Lehman Brothers; future litigation and regulation; and criminal/regulatory investigations. Panelists include:

• Sitting U.S. Bankruptcy Judge Robert E. Grossman;
• Workout specialist John Ray of Avidity Partners, who is also Chairman of Enron Creditors Recovery Corporation;
• Experienced civil litigator William J. McSherry, Jr., a partner at Crowell & Moring;
• and former Department of Justice attorney and Enron Task Force member Thomas A. Hanusik, also a partner at Crowell & Moring.

On December 11, 2008, from 1:30-5:00 pm EST, Crowell & Moring will host a CLE seminar at Grand Hyatt New York on "Credit Default Swaps: Exploring the Controversy--Market Forces, Litigation, Regulation, Accounting & Tax." Panelists will explain credit derivatives, discuss how the controversy arose over them, and where they are headed in the future. A cocktail reception will follow. A panel of Crowell & Moring litigation, bankruptcy, and financial services lawyers will be joined by speakers including:

• Robert Pickel, Executive Director and Chief Executive Officer of International Swaps and Derivatives Association (ISDA)
• Anthony Saunders, Ph.D., John M. Schiff Professor of Finance and Chairman, Department of Finance, Stern School of Business, New York University
• Douglas G. Baird, Harry A. Bigelow Distinguished Service Professor of Law; former Dean of Law School, University of Chicago
• Justin Burchett, Ph.D., Economic Advisory Services, Grant Thornton LLP; formerly managing director at Structured Credit Holdings, responsible for asset origination of credit derivatives and structured finance securities
• Bala Dharan, Ph.D., CPA, Visiting Professor of Accounting, Harvard Law School; Vice President in the financial accounting and valuation practice, CRA International, Inc.
• Judge Robert E. Grossman, Bankruptcy Judge, United States Bankruptcy Court for the Eastern District of New York
• Steven Halterman, National Office Director, PricewaterhouseCoopers; former Director of Derivatives and Financial Instruments, Metropolitan Life Insurance Company
• Stephan Kuppenheimer, Founder and Chief Executive Officer, FSI Capital
• John Ray, Managing Director, Avidity Partners, LLC; Chairman, Enron Creditors Recovery Corporation
• Chester S. Spatt, Ph.D., Kenneth B. and Pamela R. Dunn Professor of Finance and Director, Center for Financial Markets, Tepper School of Business, Carnegie Mellon University; former Chief Economist and Director, Office of Economic Analysis, U.S. Securities and Exchange Commission
• René M. Stulz, Ph.D., Everett D. Reese Chair of Banking and Monetary Economics, Ohio State University; former president of the American Finance Association; author of "Risk Management and Derivatives"

C&M Legal Panel

• Clifton S. Elgarten, Litigation Partner, Crowell & Moring; Represented estates in bankruptcy or liquidating trusts seeking recovery for financial frauds leading to the company's demise; Recently represented Enron Creditors Recovery Corporation obtaining very substantial settlements with certain financial institutions alleged to have contributed to Enron's massive failure
• Viva Hammer, Tax Partner, Crowell & Moring; Former Associate Tax Legislative Counsel, Office of Tax Policy, Department of Treasury, and oversaw issuance of guidance on notional principal contracts (swaps), including credit derivatives
• Thomas A. Hanusik, White Collar & Securities Litigation Partner; Current matters include government investigations involving credit default swaps and other subprime investment vehicles
• William M. O'Connor, Financial Services Partner, Crowell & Moring; Represented various classes of creditors in connection with unwinding or resolving derivative, including CDS, obligations relating to restructuring or bankruptcies of corporate or institutional debtors
• William C. O'Neill, Insurance/Reinsurance Partner, Crowell & Moring; Represents insurers and reinsurers which trade in credit default swaps
• William J. McSherry, Jr., Litigation Partner, Crowell & Moring; Litigated several cases involving derivatives; Co-authored chapter of book entitled Derivatives: Risk and Responsibility; Recently involved in litigation involving the accounting and financial underpinnings of the structured finance vehicles employed by Enron and Citigroup, most of which involved credit default swaps as well as other derivatives
• Nilam R. Sharma, Insurance/Reinsurance Partner, Crowell & Moring; Represents financial institutions on their insurance/reinsurance exposures relating to financial instruments including credit default swaps and collateralized debt obligation products
  

The third event in the series, "Credit Default Swaps: Exploring the Controversy-A European Perspective," will be held in London in early 2009.

Crowell & Moring LLP is an international law firm with more than 450 lawyers practicing in litigation, antitrust, government contracts, health care, corporate, intellectual property and a variety of other practice areas. More than two-thirds of the firm's attorneys regularly litigate disputes on behalf of domestic and international corporations, start-up businesses, and individuals. Crowell & Moring's extensive client work ranges from advising on one of the world's largest telecommunications mergers to representing governments and corporations on international arbitration matters. Based in Washington, D.C., the firm also has offices in New York, London, Brussels, Los Angeles, and Irvine, CA. Visit Crowell & Moring online at http://www.crowell.com.

Event Information

"Credit Default Swaps: Exploring the Controversy - Litigation and Bankruptcy"
Webinar
November 20, 2008, from 11:00am-12:30pm EST
For more information and to register, visit: http://www.crowell.com/events/CDS/invite1/default.html

"Credit Default Swaps: Exploring the Controversy--Market Forces, Litigation, Regulation, Accounting & Tax."
Seminar (CLE credit available)
On December 11, 2008, from 1:30-5:00 pm EST
Cocktail reception to follow, 5:00pm-6:00pm EST
Grand Hyatt New York
For more information and to register, visit: http://www.bvresources.com/defaulttextonly.asp?f=bvrmealeys121108live

"Credit Default Swaps: Exploring the Controversy--A European Perspective" Seminar
London
Early 2009
To receive more information as event details are finalized, please email: events@crowell.com.
After the seminars, please also visit the event links to download presentation materials.

To learn more about the Crowell & Moring partners involved in the credit default swap event series, please visit their biographies as follows:

• Clifton Elgarten
• Viva Hammer
• Thomas Hanusik
• William McSherry
• William O'Connor
• William O'Neill
• Nilam Sharma