The city of Los Angeles is suing six bond insurers for not revealing the extent of their involvement in the subprime meltdown that had an adverse effect on the cost of municipal bonds.
Los Angeles City Attorney Rocky Delgadillo filed two separate suits, one against the bond insurers and the other against banks. The suit against bond insurers alleges their involvement with the subprime mortgages should have been revealed to municipalities and their reckless actions increased the cost to taxpayers for the bonds.
The suit names Ambac Financial, MBIA Inc., XL Capital Assurance Ltd. (which is not a member of XL Capital in Bermuda), ACA Financial Guaranty Corp., Financial Guaranty Insurance Company, and CIFG Assurance North America Inc.
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