Class Actions: The next big Wall Street class action

The next class action lawsuit action on Wall Street could have the backing of the hedge funds, Forbes Magazine reports.Milberg, Weiss, Bershad & Schulman is looking into abusive practices on the part of banks' prime brokerage businesses

In particular, securities lending – which earns the Street's banks $10 billion a year – has come under scrutiny, with hedge funds privately grousing that they are paying for services they don't receive; in the case of securities lending, that means that the securities HFs are shorting are never delivered, making them naked shorts, the enemy of regulators across the land. Milberg wouldn't comment beyond partner Steve Schulman's saying, "We're thinking about what we need to do," but other lawyers, according to Forbes, say a class-action could attract the attention of a state attorney general, possibly New York's crusading Eliot Spitzer, in part because pensions and endowments are becoming an increasingly important contributor to HF assets.