{"id":5349,"date":"2012-08-31T00:00:00","date_gmt":"2012-08-31T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/08\/institutional_investor_securit_2"},"modified":"2022-04-28T15:45:14","modified_gmt":"2022-04-28T20:45:14","slug":"institutional-investor-securit-2","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/institutional-investor-securit-2\/","title":{"rendered":"Institutional Investor Securities Roundup: FHFA Can Start Discovery in MBS Litigation Against Banks, SEC Sues Puerto Rico Man Over Alleged $7M Scam, and Assets of Two Colorado Men are Temporarily Frozen Over Alleged Promissory Note Ponzi Scheme"},"content":{"rendered":"\n<p>The U.S. District Court for the District of Connecticut has decided that the Federal Housing Finance Agency can begin the discovery process in its lawsuit over $190 million in mortgage-backed securities that were sold to Freddie Mac (FMCC) and Fannie Mae (FNM.MU) through several hundred securitizations. FHFA is suing financial firms and banks, contending that they did not properly represent the risks involved in the loans backing these MBS. This ruling rejects an attempt by Royal Bank of Scotland (RBS) to stall discovery.<\/p>\n<p>To stop the discovery process from beginning, Royal Bank of Scotland contended that the Private Securities Litigation Reform Act (PSLRA) mandates a stay of discovery until a motion to dismiss is resolved. The bank said that under PSLRA, FHFA\u2019s lawsuit is a private cause of action because the agency is maintaining the action for private firms. Royal Bank of Scotland also argued that under the Securities Act or PSLRA, there is \u201cno \u2018public\u2019 investor suit.\u201d Judge Alvin W. Thompson, however, did not agree and granted permission to FHFA to begin discovery while noting that the agency is suing as a conservator and therefore the concerns that Congress had in choosing to enact PSLRA don\u2019t exist in this case. <\/p>\n<p>In an unrelated <a href=\"https:\/\/www.securities-fraud-attorneys.com\/\">securities fraud<\/a> case, the SEC is suing Ricardo Banally Rajas of Puerto Rico and his firm Shadai Yire over their alleged involvement in a $7M Ponzi scam that targeted about 200 unsophisticated investors, both from the mainland and the island, between August 2005 and February 2009. Rajas is accused of hiring sales agents that worked on commission while making a number of misrepresentations to get investors to join up. Also, the Commission says that Rajas would recruit through individual conversations and group presentations, promising to pay investors 15-50% yearly return rates while claiming that this was a risk-free investment in Shadai Yire subsidiary M &amp; R International Group, Corp., which would then invest in commodities contracts. Unfortunately, Rajas did not invest these clients\u2019 money, instead using the funds to pay off investors with newer investors\u2019 cash. He also allegedly misappropriated at least $700K to support for his lifestyle. The SEC wants disgorgement, injunctions, and fines.<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.investorlawyers.com\/blog\/institutional-investor-securit-2\/\"  title=\"Continue Reading Institutional Investor Securities Roundup: FHFA Can Start Discovery in MBS Litigation Against Banks, SEC Sues Puerto Rico Man Over Alleged $7M Scam, and Assets of Two Colorado Men are Temporarily Frozen Over Alleged Promissory Note Ponzi Scheme\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. District Court for the District of Connecticut has decided that the Federal Housing Finance Agency can begin the discovery process in its lawsuit over $190 million in mortgage-backed securities that were sold to Freddie Mac (FMCC) and Fannie Mae (FNM.MU) through several hundred securitizations. FHFA is suing financial firms and banks, contending that [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3757],"tags":[],"class_list":["post-5349","post","type-post","status-publish","format-standard","hentry","category-mortgagebacked-securities"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Institutional Investor Securities Roundup: FHFA Can Start Discovery in MBS Litigation Against Banks, SEC Sues Puerto Rico Man Over Alleged $7M Scam, and Assets of Two Colorado Men are Temporarily Frozen Over Alleged Promissory Note Ponzi Scheme &#8212; Investor Lawyers Blog &#8212; August 31, 2012<\/title>\n<meta name=\"description\" content=\"The U.S. District Court for the District of Connecticut has decided that the Federal Housing Finance Agency can begin the discovery process in its lawsuit &#8212; August 31, 2012\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/institutional-investor-securit-2\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Institutional Investor Securities Roundup: FHFA Can Start Discovery in MBS Litigation Against Banks, SEC Sues Puerto Rico Man Over Alleged $7M Scam, and Assets of Two Colorado Men are Temporarily Frozen Over Alleged Promissory Note Ponzi Scheme &#8212; Investor Lawyers Blog &#8212; August 31, 2012\" \/>\n<meta name=\"twitter:description\" content=\"The U.S. District Court for the District of Connecticut has decided that the Federal Housing Finance Agency can begin the discovery process in its lawsuit &#8212; August 31, 2012\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; 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