Tag Archives: MBS

SDNY Blog Returns as Steptoe Blog

The SDNY Blog is relaunching as a publication of Steptoe & Johnson LLP.  We expect to post several times a week on decisions and other developments in the Southern District of New York.  You can find us right here at www.sdnyblog.com, or follow us on Twitter or Facebook. Here’s a quick summary of what’s been happening in the Southern … Continue Reading

Judge Oetken Certifies Liability-Only Class in MBS Case Against JP Morgan

In an opinion yesterday, Judge Oetken certified a class, for purposes of liability only, in a case alleging that certain JP Morgan mortgage-backed securites offering documents falsely represented (among other things) that the underlying loans complied with certain underwriting standards when, in fact, those standards were abandoned. Judge Oetken rejected JP Morgan’s argument (among many … Continue Reading

Judge Scheindlin Rules MBS Repurchase Suit is Time-Barred; Splits With Judge Hellerstein

In an opinion Friday, Judge Scheindlin dismissed as time-barred a case alleging that certain mortgage-backed securities were not as represented.  The plaintiff claimed that the statute of limitations did not begin to run until the defendant refused to repurchase or cure the defects, but Judge Scheindlin, relying largely on the First Department’s recent decision in … Continue Reading

Judge Stein Concludes Security “Holders” Cannot Bring Fraud Claims Under New York Law, Dismisses Case Against Citi

In an opinion today, Judge Stein dismissed a case accusing Citibank of fraud and negligent misrepresentation for understating its exposure to mortgage-backed securities.  He dismissed the case because the plaintiffs were “holders” of the stock during the relevant time period (i.e., they did not buy at inflated prices and sell at a loss), and relied … Continue Reading

Judge Forrest Denies Certification in Securities Class Action Against Deutsche Bank

Judge Forrest, in an opinion today, denied class certification in a case accusing Deutsche Bank of misleading public statements concerning its exposure to mortgage-backed securities. The opinion was driven by Judge Forrest’s decision to disqualify the plaintiffs’ expert, Michael Marek, who testified that Deutsche Bank’s global registered shares (“GRSs”) traded on an efficient market.  She … Continue Reading

Judge Furman Joins Consensus Endorsing “Self-Affecting” Theory of FIRREA; Splits with Judge Marrero on Scope of Predicate Bank Fraud Law

In an opinion today, Judge Furman largely denied Wells Fargo’s motion to dismiss a government lawsuit relating to its underwriting of government-insured mortgage loans. Judge Furman joined Judges Rakoff and Kaplan in holding that the Financial Institutional Reform, Recovery, and Enforcement Act (“FIRREA”), which allows the government to pursue civil charges against those who commit … Continue Reading

Judge Nathan Dismisses Bank of America’s $500 Million Suit Against Bear Stearns Over “CDO Squared”

In an opinion today, Judge Nathan granted summary judgment and dismissed a $500 million suit brought by Bank of America against Bear Stearns Asset Management and three of its executives.  The suit concerned Bank of America’s underwriting of a “CDO squared” that included substantial mortgage-related assets from two Bear Stearns hedge funds.  Bank of America … Continue Reading

Judge Rakoff Rules that Bank Misconduct “Affects” the Bank Itself Under FIRREA

In an opinion posted online today, Judge Rakoff allowed the federal government to proceed with civil claims against Countrywide and Bank of America under the Financial Institutions Reform, Recovery, and Enforcement Act, or “FIRREA,” for having misrepresented the quality of home loans sold to Fannie Mae and Freddie Mac.  FIRREA applies only to conduct that “affects” … Continue Reading

Judge Baer Reinstates MBS Claims After Second Ciruit’s NECA Decision

Citing the Second Circuit’s recent decision in NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145 (2d Cir. 2012), Judge Baer yesterday granted plaintiffs’ motion for reconsideration in two cases based on allegedly fraudulent statements in connection with the sale of mortgage backed securities. The order reinstated claims he had previously … Continue Reading

Judge Rakoff Grants JP Morgan Near Complete Win in Dexia MBS Suit Where Plaintiffs Did Not Read Offering Documents

Judge Rakoff yesterday issued one of his short “bottom line” Orders — with full opinion to follow — granting JP Morgan near complete summary judgment in a case in which the European bank Dexia and its former subsidiary accused Bear Stearns (later acquired by JP Morgan) of failing to comply with its stated underwriting guidelines … Continue Reading

ACLU Sues Morgan Stanley For Discrimination and Predatory Lending

Today, the ACLU (along with the National Consumer Law Center ) filed a class action suit against Morgan Stanley on behalf of African American homeowners in Detroit, Michigan. The complaint alleges that Morgan Stanley’s policies and practices enabled and encouraged predatory lending by the (now bankrupt) New Century Mortgage Company, that disparately impacted African American … Continue Reading

Judge Sullivan Dismisses UBS Securities Class Action

It has been a busy week for Judge Sullivan. On Friday, Judge Sullivan dismissed with prejudice a securities fraud class action brught against UBS and certain of its executives alleging that UBS misled investors about its exposure to mortgage-backed securities and auction rate securities, and about its compliance with U.S. tax and securities laws.… Continue Reading