Lehman Verdict Upheld In Mortgage Fraud Case

Law360, New York (December 11, 2006, 12:00 AM EST) -- In a blow to Lehman Bros. Holdings Inc., a federal appeals court has upheld a jury’s finding that the financial giant can be held liable for its part in a long-running mortgage refinancing scheme by bankrupt First Alliance Corp. that bilked troubled homeowners of millions of dollars.

First Alliance was driven into liquidation in March 2000 after allegations of its fraudulent lending practices surfaced, leading to two separate actions that were consolidated against Lehman Brothers Inc. and its subsidiary Lehman Commercial Paper Inc.

A three-judge panel...
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