The mailboxes of Fannie Mae, Freddie Mac, AIG and Lehman Brothers are filling up with subpoenas demanding that the humbled institutions hand over vast stores of data, documents and electronic records.

It's a fishing expedition likely to yield enough evidence of impropriety for prosecutors to charge a handful of bad guys for fueling the sudden implosion of financial markets--and set off an inevitable tidal wave of shareholder lawsuits brought against nearly every major financial institution.

Welcome to the next great mega-litigation, likely to rival the more than $12 billion spent cleaning up the Enron and WorldCom debacles. But while the emerging litigation will easily match the Enron and WorldCom lawsuits in scope, it may not prove as titillating as Enron did.

"There will likely be a significant amount of litigation that follows what's been happening in the market," says Jesse Finkelstein, a partner at Wilmington, Del.-based law firm Richards, Layton & Finger. "And it will probably have a similar flavor to previous waves of shareholder litigation. There will probably be accusations of some sort of mismanagement used as a hook to make claims about the board of directors being asleep at the switch."

Considering the near-catastrophic collapse of the nation's financial system in the past couple of months, it seems more likely than not that somebody was asleep somewhere. But who and why? In the next decade, prodigious sums of money will be spent trying to "answer" those questions.

Even before the current crisis, the number of securities class-action suits filed during the first half of the year rose by more than 100% over the same period for the preceding year, according to a recent report by Stanford Law School Securities Class Action Clearinghouse. The report noted that so-called "mega-lawsuits" had nearly tripled in the first half of the year as a result of the credit crisis and extreme market volatility.

"This is certainly a major litigation event," said Samuel Rudman, a partner at New York-based plaintiffs firm Coughlin, Stoia, Geller, Rudman & Robbins. "There has already been a lot of lawsuits brought in connection with subprime mortgages, and there are going to be a lot more. If you're a litigator, you're busy and probably will be for a while." Coughlin Stoia spearheaded the massive shareholders' lawsuit against Enron, which settled in September for a whopping $7.2 billion.

But Andrew Weissman, a partner at Jenner & Block and the former chief of the U.S. Department of Justice's Enron Task Force, thinks there are important differences between the corporate shenanigans of the late 1990s and what's going on now. "I'm not sure if Enron and WorldCom are the best analogies. There were all kinds of criminal activities behind Enron's collapse," he says. "There might be compliance issues, but I'm not sure there was anything criminal. Ultimately, I'm not sure anyone really knows what caused the financial crisis."

It promises to be different in another way. Suing disgraced former executives and cowed corporations is a cakewalk compared with suing the government, which recently took a direct equity stake in many of the banks likely to face suits. By doing so, Washington has effectively made itself a party to the litigation.

"It gets much more complicated when the government is involved," said Finkelstein. " "Ultimately, the involvement of the government as an investor and guarantor in an institution could make it much harder for plaintiffs to collect and could reduce the amount they win, which will likely act as a disincentive for some of the plaintiffs' firms."

Ironically, 2008 saw the first dip in premiums for directors-and-officers liability insurance policies in five years. After the accounting scandals in the early part of the decade, insurance premiums increased by as much as 50% to 100%. They remained high until earlier this year.

The policies cover things such as legal fees, settlements and judgments, and protect executives and members of the board of directors against lawsuits accusing them of wrongful acts in their capacities as directors and officers. Nearly all companies with publicly traded stock have some form of directors-and-officers liability insurance. It was invented by AIG.

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