One interesting theory that we recently heard is that Congress may step in and essentially reach a global settlement on these issues because, if it doesn't, the fear is that the financial markets may delay fully disclosing the true extent of their issues/liabilities.
Merrill Lynch, Citigroup, and others clearly sold products not suitable for retail customers to retail customers. However, these companies are likely to maintain they did so in "good faith".
Fees and risks were not properly disclosed. The issue of undisclosed fees may prove to be extremely fertile ground for litigation.
Inappropriate relationships by so called "independent advisers" will come under legal scrutiny.
There will be grounds for lawsuits for recommendations that amount to "churning".
A mammoth wave of lawsuits against Bear Stearns (BSC), Merrill Lync (MER), Citigroup (C), Lehman (LEH), Morgan Stanley (MS), Goldman Sachs (GC), JPMorgan (JPM) and others is likely on the way.
By agreeing to reimburse Springfield, Merrill Lynch may have inadvertently opened the door for more litigation.
Merrill Lynch, Citigroup and other got caught up in their own CDO Ponzi schemes once the pool of greater fools ran out. A hornet's nest of litigation is now on the way. Legal bees will be buzzing over this for a long, long time.
Not sure of the likelihood of this happening, but I'd definitely keep an eye on bills being filed in the House.