Back when liabilities from asbestos lawsuits were threatening to take down Lloyd's of London's reinsurance underwriting markets, British high finance came up with a Brilliant Plan: find braindead outsider Names (investors) to underwrite reinsurance policies for Lloyd's syndicated asbestos policies. And then run screaming and braying to Parliament to pass laws immunizing them from shareholder suits by mandating that any such lawsuits be heard in English courts and under English law... and making sure English law and English courts woudln't provide a remedy to securities fraud plaintiffs.
This was particularly reprehensible, as part of Lloyd's hedge strategy in the face of these liabilities was to recruit tens of thousands of naive American investors, exploiting Americans' inexplicable desire to associate themselves with British nobility and panache -- all who would be liable "down to their last cufflink" -- thus unburdening their own gentrified balance sheets.
As if American dentists wear cufflinks.
So little-guy investors ended up bailing out a UK financial institution.
(By the way, doesn't this sound familiar? The toxic asset problem... except with environmental and health catastrophe, rather than housing bubbles)
Lloyd's strategy worked.
Looks like the auditors are about to do the same, now. In the form of liability caps to securities fraud plaintiffs irate about the fact that the auditors promised banks were in good health -- but only because the government explicity -- but secretly -- promised to bail out those banks.
Whoops.
Well, at least the English are honest about their doggeded favoritism to the financial elite. Our lawmakers in the U.S. still feel the need to pander to more... earthy... sensibilities. Half our citizens do live, after all, in wig wams.
