Wave of lawsuits over CDSs coming?

The credit default swap market, as you know, has exploded as of late. The market's lack of a central clearing structure is an apt symbol for the current state of things. The New York Times notes that there were lots of bespoke deals that were struck in recent years, many of them one-off sort of private deals designed to insure certain other derivatives, such as a CDO. But as the Times notes, a legal dispute between hedge fund Paramax Capital and UBS is being closely watched. Some say it intimates a lot more suits. Basically, a deal between the two called for Paramax to insure some CDOs underwritten by UBS. Well, those CDOs tanked, and UBS wanted Paramax to put up more collateral, which ignited a long dispute.  

For more:
- here's the article

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