On July 30, Judge Denise Cote of the United States District Court for the Southern District of New York granted the motion for partial summary judgment brought by FHFA, as conservator for Fannie Mae and Freddie Mac. FHFA initiated securities fraud cases against a number of banks alleging false statements made in the offering documents for RMBS purchased by the GSEs between 2005 and 2007. FHFA’s action remains pending against HSBC, Goldman Sachs, RBS Securities and others. In its motion for summary judgment, FHFA sought a ruling that no reasonable jury could find that the GSEs knew the banks’ statements were false. The defendants argued seven categories of circumstantial evidence illustrated the GSEs’ awareness of the information that they now allege was concealed. These included the GSEs’ knowledge about loan originators, participation in the subprime and Alt-A markets, knowledge of risk associated with reduced documentation programs, and anti-predatory lending reviews. The court held that these categories were not enough to prove that the GSEs had actual knowledge that any representation was false, as required by Sections 11 and 12(a)(2) and the Blue Sky Laws. The court therefore granted summary judgment for FHFA on that issue. Decision.