The fallout from the credit crisis spread Monday when Financial Guaranty Insurance Company, the US bond insurer, filed a lawsuit accusing IKB, the German bank, and its affiliates of a fraud that left it exposed to potential liabilities of $1.9bn. In the complaint, filed in New York, FGIC alleged that IKB and its affiliates provided false and misleading information that convinced the bond insurer to assume billions of dollars of potential losses on one of IKB’s off-balance sheet SIVs. The filing comes as FGIC, part-owned by buy-out group Blackstone, is struggling after losing its crucial AAA credit ratings.

This entry was posted by Gwen Robinson on Tuesday, March 11th, 2008 at 5:35 and is filed under Capital markets, Private equity. Tagged with FGIC, IKB. Edit this entry.