MBIA Case 01/11/2008

OCTOBER 2011 - According to the Notice:

1. Description of the Action and Class: This Notice relates to a proposed Settlement of claims in a pending class action lawsuit brought by investors alleging that the price of MBIA common stock was artificially inflated during the Class Period as a result of allegedly material false statements and omissions by Defendant MBIA and the Individual Defendants Gary C. Dunton and C. Edward Chaplin (together with MBIA, the “Defendants”) regarding the nature and extent of MBIA’s exposure to certain collateralized debt obligations. The proposed Settlement, if approved by the Court, will settle claims of all persons and entities who purchased or otherwise acquired MBIA common stock during the Class Period (i.e., from July 2, 2007 through and including January 9, 2008), and who were damaged thereby (the “Class”), except for certain persons and entities who are excluded from the Class by definition (see ¶ 26 below) or who validly elect to exclude themselves from the Class (see ¶¶ 76-79 below).

2. Statement of Class’s Recovery: Subject to Court approval, and as described more fully below, Lead Plaintiff, on behalf of itself and the Class, has agreed to settle all claims based on the purchase or acquisition of MBIA common stock that were or could have been asserted against Defendants in the Action in exchange for a settlement payment of $68,000,000 in cash (the “Settlement Amount”) to be deposited into an interest-bearing escrow account (the “Settlement Fund”). The Net Settlement Fund (the Settlement Fund less Taxes, Notice and Administration Costs, and attorneys’ fees and Litigation Expenses awarded by the Court) will be distributed in accordance with a plan of allocation that is approved by the Court, which will determine how the Net Settlement Fund shall be allocated among members of the Class. The proposed plan of allocation (the “Plan of Allocation”) is set forth on pages 7-10 below.

3. Estimate of Average Amount of Recovery Per Share: Lead Plaintiff’s damages expert estimates that approximately 95,879,000 shares of MBIA common stock purchased during the Class Period may have been affected by the conduct at issue in the Action. If all Class Members elect to participate in the Settlement, the estimated average recovery per affected share of MBIA common stock would be approximately $0.71 before deduction of Court-awarded attorneys’ fees and expenses and the costs of providing notice and administering the Settlement. Class Members should note, however, that this is only an estimate based on the overall number of potentially affected shares. Some Class Members may recover more or less than the estimated amount per share.

4. Statement of Average Amount of Damages Per Share: The Parties do not agree on the average amount of damages per share that would be recoverable if Lead Plaintiff were to prevail in the Action. Defendants do not agree with the assertion that they engaged in any actionable conduct under the federal securities laws or that any damages were suffered by any members of the Class as a result of their conduct.

SEPTEMBER 2011 - MBIA Inc. settled a putative shareholder class action agreeing to pay $68 million to resolve allegations that it hid its exposure to billions in losses tied to residential mortgage-backed securities.

JULY 2008 - Suit filed against Bond Insurers and Wall Street Investment Banks

L.A. City Attorney Rocky Delgadillo has filed two separate lawsuits in the Superior Court of California for the County of Los Angeles against major Wall Street Investment banks, including bank of America, Inc. and UBS AG and several municipal bond insurers accusing them of fraud and antitrust. The city of Los Angeles like other cities, U.S. states and agencies issues municipal bonds to fund various public projects. The lawsuit against the Wall Street firms alleges that the firms colluded to rig the bidding process and price-fixing in the municipal derivatives industry. Rocky Delgadillo said that as a result, Los Angeles did not obtain competitive rates, losing tens of millions of dollars it should have earned. The other lawsuit is filed against more than 30 municipal bond insurers, including Ambac Financial (NYSE:ABK - News), MBIA Inc’s (NYSE:MBI - News) MBIA Insurance Corp and Financial Guaranty Investment Co., and alleges that they charged municipalities fraudulently high premiums. According to the complaint the city was forced to purchase insurance from a triple-A-rated guarantor in order to benefit from that top rating. The lawsuits allege that it could cost taxpayers millions of dollars. The Los Angeles city attorney’s office detailed the complaints in a statement released on Wednesday.

JANUARY 2008 - Class Action Filings

According to a press release dated January 11, 2008, the Complaint alleges that during the Class Period, MBIA and the individual defendants, Chief Executive Officer and Chief Financial Officer, violated the federal securities laws by issuing false and misleading press releases, financial statements, filings with the SEC and statements during investor conference calls. The Complaint alleges that, throughout the Class Period, Defendants misrepresented and/or failed to disclose the true extent of MBIA’s exposure to losses stemming from MBIA’s insurance of residential mortgage-backed securities (”RMBS”), including in particular its exposure to so-called “CDO-squared” securities that are backed by RMBS. This highly risky exposure was belatedly disclosed in a series of public statements beginning on December 19, 2007 and ending on January 9, 2008, the last day of the Class Period. One analyst observed that MBIA had withheld from the public the riskiest parts of its insured portfolio, while others expressed similar dismay at MBIA’s failure to apprise investors of these risks in a timely manner.

The Complaint alleges that the Defendants violated Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder and that [individual] Defendants violated Section 20(a) of the Exchange Act.