Broker-Dealer Litigation - Greenberg Traurig LLP

however, the court found that the stories did not tie back to defendants and thus the claims were
not time-barred. Finally, the defendants moved to dismiss plaintiffs’ claims for failure to allege
a material misrepresentation concerning lending standards, appraisal standards, statement of risk,
and credit ratings; the court found: that the plaintiffs adequately pled a material
misrepresentation or omission with regard to appraisal standards against some of the originators
listed and dismissed the allegations against those inadequately pled; that plaintiffs failed to allege
that defendants knew the credit enhancement statement was false when it was made; that
plaintiffs failed to allege that credit rating agencies knew the ratings were false when given; and
that plaintiffs adequately pled a misrepresentation or omission concerning underwriting
guidelines as they pertain to certain listed originators but dismissed the allegations as to any
other.
Footbridge Ltd. Trust v. Countrywide Fin. Corp., 770 F. Supp. 2d 618 (S.D.N.Y. 2011).
The court granted defendants’ motion for summary judgment on plaintiffs’ claim under
Section 12 of the Securities Act of 1933. The court found that plaintiffs’ claims were barred by
the Securities Act’s statute of repose. The statute of repose provides that no action shall “be
brought to enforce a liability created . . . under [Section 12(a)(2)] more than three years after the
sale” of the security at issue. Plaintiffs had brought a Section 12(a)(2) claim based on sales that
occurred in 2006 and argued that class actions filed on these issues in 2007 and 2008 tolled this
limitations period. The court rejected this argument because of the language of the statute
indicating that an action may be commenced after the limitations period “in no event” and
because it is settled that a federal statute of repose is not subject to equitable tolling.
In re IndyMac Mortg.-Backed Sec. Litig., 793 F. Supp. 2d 637 (S.D.N.Y. 2011).
The court granted in part three motions to intervene and denied plaintiff’s motion for
leave amend its complaint for claims including alleged violations of Section 12(a)(2) of the
Securities Act of 1933. Investors in mortgage pass-through certificates filed putative class action
against issuer, former officers and directors for allegedly making misrepresentations and
omissions in connection with the sale of the issuer’s mortgage pass-through securities. In
previous litigation (“IndyMac I”), the court consolidated two cases involving the same violations
of the 1933 Act by the defendant issuer. Without opposition, the court named a single plaintiff
to represent the class. In IndyMac I, the court then dismissed all claims arising out of securities
that the named plaintiff had not purchased. Three other parties then made separate motions to
intervene since they purchased additional securities that the named plaintiff had not. The court
dismissed one party’s motion to intervene and assert certain claims because, although the party
had originally filed suit within the statute of repose, the party had allowed the court to
consolidate its case and name a single plaintiff to represent the class. The court, therefore,
considered the party’s motion to intervene and assert claims for misstatements occurring more
than three years prior barred by the three-year statute of repose. The two other parties were
likewise able to intervene only as to Section 12(a)(2) claims occurring within the three-year
statute of repose. The court did find, however, that the one-year statute of limitations had been
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