While the jury is out on whether we will see truly high-profile enforcement action against top Wall Street firms, more aggrieved investors are pressing their cases with private suits, increasingly often in state court. What remains to be seen is how much litigation we'll witness. There are plenty of investors who potentially could make a case.

The latest comes from Cambridge Place Investment Partners, of Boston, which has sued the U.S. branches of Barclays, HSBC and RBS. It also makes some brow-raising allegations about JP Morgan, Citigroup, Credit Suisse, Deutsche Bank, Merrill Lynch, UBS, Goldman Sachs and  Morgan Stanley. The suit charges that these entities all sold mortgage-backed securities fraudulently (fraud news).

The banks stand accused of failing to conduct proper due diligence before packaging the loans and making untrue statements in prospectuses and sales pitches. The suit in a sense targets the entire food chain. If the plaintiffs win, notes the Telegraph, they will get their money back and return the securities to the banks, which have enough issues with toxic assets. You would have to think that this will be closely watched. We may indeed see investors grow more emboldened to recover losses in this manner.

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