UK: Forensic Structured Products Advisory - Bringing Clarity to Complex Situations

Last Updated: 9 June 2010
Article by Deloitte Corporate Finance Group

Most Read Contributor in UK, August 2017

Complex financial structured products were at the heart of the capital markets and key to many investment banks' and financial firms' profit streams while financial times were good. However, these very same structures are seen by many as also having been at the epicentre of the financial crisis that followed. In the post-crisis world, banks, financial firms, their clients, their counterparties and regulators have found themselves facing some highly novel and complex challenges when trying to assess, for example, whether there are valid claims for losses incurred, particularly in light of the highly volatile markets at the time of the collapse.

At a time when many banks and investors were just starting to assess their post-crisis position, the SEC's recent announcement that it is investigating allegations of fraud and mis-selling regarding Goldman Sachs' packaging of subprime mortgages into synthetic collateralised debt obligations (CDOs) will have once again caused firms to reflect on their own situation. This has further focused the spotlight on complex structured products.

It is not clear that actions brought by the SEC and other parties will be successful, as illustrated by the recent decision of a New York state judge to throw out a lawsuit against Barclays Capital Inc. on the basis that the claimant was a "sophisticated" investor that should have been "in the position of appreciating the inherent risks associated with debt securities". Notwithstanding this, further regulatory investigations, claims and civil litigation centring on these complex structured transactions are seen by many to be inevitable.

How Deloitte Can Help

Deloitte has exceptional depth of experience in dealing with all asset classes of structured products. For example:

  • CDO valuation assessments.
  • Structured product unwind and close out.
  • Derivative claim calculation and support.
  • Restructuring Structured Investment Vehicles, Asset Backed Securities and Collateralised Loan Obligations.
  • Due Diligence on underlying assets with a securitisation.

In addition, Deloitte forensic professionals have helped some of the world's leading banks, companies and funds deal with investigations and disputes. We have leading technical know-how, proprietary software, and cutting edge methodologies to assist firms to evaluate their positions. Our computer forensic and data analytics specialists are adept at searching, analysing and modelling data.

We have the ability to present compelling written expert reports and, when needed, oral testimony – in essence offering the distillation of complex issues and ideas into manageable concepts and facts. We apply these various skills and expertise to assist clients in a range of complex dispute, asset recovery or regulatory circumstances.

We have performed many engagements dealing with:

  • Valuation disputes.
  • Interpretation and clarification of documentation.
  • Wind up and close out procedures.
  • Independent investigations of facts and circumstances.
  • Mis-selling disputes.
  • Regulatory investigations or reviews.
  • Litigation support working with lawyers, regulators and other interested third parties.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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