Second Circuit Ruling Applied to Revive MBS Claims

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On May 1, Judge Harold Baer, Jr. of the U.S. District Court for the Southern District of New York reinstated previously dismissed claims in two class actions brought by several pension fund plaintiffs against Royal Bank of Scotland Group PLC and Residential Capital LLC, among others. Judge Baer had previously dismissed claims under the Securities Act of 1933 as to certain RMBS for lack of standing. In light of a recent Second Circuit decision, NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145 (2d Cir. 2012), Judge Baer reconsidered his prior orders and held that the plaintiffs had standing to assert claims on behalf of purchasers of all RMBS issued under the same shelf registrations that were backed by mortgages originated by the same lenders that originated the mortgages backing the certificates purchased by the named plaintiffs. The court’s order revived claims with respect to a total of 49 offerings across both cases that previously had been dismissed. Order.

Topics:  Class Action, Mortgage-Backed Securities, Pensions, Residential Capital LLC, Royal Bank of Scotland

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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