Felix Salmon, with help from Nick Rizzo, crunched some numbers on the 17 bank lawsuits filed Friday by the Federal Housing Finance Agency.  Look who's #1. By all appearances, JPMorgan is the clear winner, until one realizes that Bank of America is split 3 ways - Countrywide, Merrill Lynch, BofA. 

Starting with the league table, Mr. Salmon calculated a total score by taking the number of pages in the lawsuit, adding the number of individual defendants multiplied by 10, and then adding an extra 100 points if the FHFA was asking for punitive damages. 

The FHFA Lawsuit League Table  [Reuters Blog - see below link]

Explanations and Comments.   As noted above, Mr. Salmon used 3 different metrics to see how aggressive any given lawsuit was:  (i) number of individuals named defendants;  (ii) total number of pages in the suit;  (iii) whether it asked for punitive damages.  My favorite of the last form is the one taking aim at the Squid (which, incidentally, quotes Matt Taibbi at the bottom of page 77):

Goldman Sachs Mortgage Company, GS Mortgage Securities Corp. and Goldman, Sachs & Co.’s misconduct was intentional and wanton…  Punitive damages are therefore warranted for the actions of all three - in order to punish them in such a way as to deter them from future misconduct and to better protect the public.

In any case, JP Morgan, here, is the clear winner - until you add the 3 scores that truly reflect BofA.  After adding the 3 scores together, Bank of America's total reaches 884 points, which far exceeds JPMorgan's 757.

Mr. Salmon continues:  All silliness aside, the total number of named defendants here, including various different individuals and corporate entities, is a whopping 268, including a small amount of double-counting.  This is a full-employment act for lawyers, and I’m pretty sure they’re going to be fighting this one out for a long time; I can’t imagine, having put all of this work into these suits, that the government is going to be remotely willing to simply give all of these banks blanket immunity as part of a global settlement with the 50 state attorneys general.

I’ll have more on the substance of the suits later; suffice to say that they’re strong, and aggressive, and exactly what I’ve been looking for for a while. These banks lied to investors when they put together mortgage securitizations. And one way or another, they’re about to start paying for that. About time too.   [Reuters Blog, 9/2/11]