{"id":5429,"date":"2013-03-28T00:00:00","date_gmt":"2013-03-28T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2013\/03\/2nd_circuit_eases_mbs_lawsuits"},"modified":"2022-05-04T13:35:44","modified_gmt":"2022-05-04T18:35:44","slug":"2nd-circuit-eases-mbs-lawsuits","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/2nd-circuit-eases-mbs-lawsuits\/","title":{"rendered":"2nd Circuit Eases MBS Lawsuits by Reinstating Pension Fund\u2019s Case Against Wells Fargo, Royal Bank of Scotland, Wachovia, & Others"},"content":{"rendered":"

The U.S. Court of Appeals for the Second Circuit has reinstated New Jersey Carpenters Health Fund v. Royal Bank of Scotland Group PLC (RBS)<\/em>, which also includes defendants Wells Fargo Advisors (WFC), McGraw-Hill (MHP), and a number of others. The decision will ease class action mortgage-backed securities lawsuits<\/a> by investors.<\/p>\n

Holding that the plaintiff did not satisfy pleading requirements under the Securities Act of 1933 for lawsuits, a district court had thrown out the case, which was filed by the New Jersey pension fund. The 2nd circuit, however, reversed the ruling, finding that the allegations made (that an unusually high number of mortgages involving a security had defaulted, credit rater agencies downgraded the ratings of the security after modifying how they account for inadequate underwriting, and ex-employees of the relevant underwriter vouched that underwriting standards were being systematically ignored) make a plausible claim that the security\u2019s offering documents incorrectly stated the applicable writing standards. This would be a Securities Act of 1933 violation.<\/p>\n

Expected to benefit from the ruling are federal credit union regulators, including the National Credit Union Administration, which has submitted a number of MBS lawsuits against financial firms and banks. Last year, NCUA filed a $3.6 billion action against JP Morgan Chase (JPM)<\/a> accusing the latter\u2019s Bear Stearns & Co. unit of employing misleading documents to sell mortgage-backed securities to four corporate credit unions that went on to fail. The credit union agency contends that the mortgage in the pools collateralizing the RMBS (residential mortgage-backed securities) did not primarily adhere to underwriting standards noted in the offering statements and the securities were much riskier than what they were represented to be. NCUA has also sued a few of the defendants that the New Jersey Carpenters Health Fund is suing, as well as Goldman Sachs Group (GS) and Barclays.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

The U.S. Court of Appeals for the Second Circuit has reinstated New Jersey Carpenters Health Fund v. Royal Bank of Scotland Group PLC (RBS), which also includes defendants Wells Fargo Advisors (WFC), McGraw-Hill (MHP), and a number of others. The decision will ease class action mortgage-backed securities lawsuits by investors. Holding that the plaintiff did […]<\/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":[3752,3757,4036,3836],"tags":[],"class_list":["post-5429","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-mortgagebacked-securities","category-royal-bank-of-scotland","category-wells-fargo"],"yoast_head":"\n2nd Circuit Eases MBS Lawsuits By Reinstating Pension Fund's Case | Securities Fraud Attorney<\/title>\n<meta name=\"description\" content=\"Read more about the Second Circuits decision to ease MBS lawsuits by reinstating pension fund's case against Wells Fargo, RBS and others\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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