The recent upheaval in the U.S. financial industry has generated another flurry of securities class-action lawsuits.

During September, investors in 26 companies filed new federal lawsuits, according to RiskMetrics Group’s Securities Class Action Services data as of Sept. 26. In addition, there were nine new cases brought in state courts. The volume of federal filings exceeds the 20 investor cases filed in September 2007, which was soon after the collapse of the subprime mortgage market. (Editor’s note: This data doesn’t include lawsuits filed by the Securities and Exchange Commission.) Even before this latest wave of lawsuits, federal case filings were on pace this year to surpass historical averages, largely because of the continuing investor losses caused by the credit crisis.

The pace of filings began to pick up after the U.S. government took over mortgage giants Freddie Mac and Fannie Mae on Sept. 7. The next day, investors sued Fannie Mae and its officers, alleging that they made “materially false and misleading statements” about the firm’s business and prospects and misrepresented the company’s financial statements.
Investors also filed a separate lawsuit against the five underwriters who participated in Fannie Mae’s $2 billion preferred stock offering in May. The defendants in that case include Merrill Lynch, Citigroup, Morgan Stanley, UBS Securities, Wachovia Capital Markets, and four senior executives of Fannie Mae. Likewise, Citigroup, Goldman Sachs, and JPMorgan Chase were sued by Freddie Mac investors over a $6 billion preferred stock offering in November 2007.

After Lehman Bros. filed for bankruptcy protection on Sept. 15, holders of the company’s preferred “Series J” stock sued senior Lehman executives and the six investment banks that underwrote that offering. That suit contends that the prospectus for the February offering contained “material misstatements and omissions.”

In addition, Constellation Energy was sued on Sept. 22 by investors whose shares plunged over concern that the company’s energy trading operations would be hampered by Lehman’s bankruptcy.

Another casualty of Lehman’s bankruptcy was Reserve Management’s “Primary Fund” The money-market fund was hit with multiple lawsuits after its holdings of $785 million in unsecured Lehman debt became virtually worthless after the investment bank’s bankruptcy filing. According to Business Week, the case appears to the first time that investors have sued a money-market fund manager for allowing assets to fall below $1 for each dollar put in. Ameriprise Financial also has sued, alleging the fund managers tipped off favored institutional clients about the fund’s troubles before Ameriprise’s retail brokerage customers could pull their money out.

Other financial firms facing new suits include: Canadian Imperial Bank of Commerce (over disclosure on its exposure to U.S. subprime mortgages); BankUnited (over disclosure of its mortgage lending practices); Northern Trust (auction rate securities); and State Street Global Advisors (investors in the firm’s “Intermediate Fund” contend that State Street failed to fully disclose the fund’s mortgage investments).

As usual, investors have continued to sue non-financial firms over significant share declines. Among the companies to be hit with recent lawsuits are Carter’s, Oshkosh, Spectranetics, Hansen Natural, and NextWave Wireless.