Massachusetts District Court Grants UBS’s Motion to Dismiss Credit Rating Allegations

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On September 28, Judge Denise J. Casper of the federal district court for the District of Massachusetts granted in part and denied in part UBS Securities’s motion to dismiss a complaint concerning its sale of more than $109 million worth of RMBS. The court concluded that plaintiff Capital Ventures International, an alleged purchaser of the securities, had adequately pleaded that the offering materials contained misstatements and omissions regarding underwriting guidelines, owner-occupancy rates, appraisals, and loan-to-value ratios. Judge Casper granted, however, UBS’s motion to dismiss as to allegations that either the credit rating agencies or defendants knew that the credit ratings assigned to the securitizations at issue were unjustified. The Court also dismissed claims against non-underwriter defendants, who the Court determined did not constitute statutory sellers, and held that the control person allegations were insufficient to state a claim. Decision.

Published In: Business Torts Updates, Civil Procedure Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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