Broker-Dealer Litigation - Greenberg Traurig LLP

presumption by severing the link between misrepresentation and price, and plaintiffs were unable
to prove that common questions predominated. In addition, the court found that a pension trust
fund and individual plaintiff were unable to adequately represent the class because they were inand-out
traders who could not serve as class representative (though one plaintiff was an adequate
representative, satisfying the Rule 23(a) adequacy requirement).
In re Dynex Capital, Inc. Sec. Litig., 2011 WL 781215 (S.D.N.Y. Mar. 7, 2011).
In a suit brought by purchasers of mortgage backed securities collateralized by mobile
home loans originated by the defendants, the plaintiff sought class certification. The court
certified the class, rejecting arguments from the defendants that the plaintiff was not an adequate
class representative because it lacked knowledge of the facts and the case was driven by counsel,
and that typicality was lacking because the lead plaintiff’s claim was subject to an atypical
defense. The court also spurned the defendants’ attempt to show that the fraud-on-the-market
presumption could not be invoked because the relevant bond market was not efficient, as the
plaintiff had shown that reliable tools existed for assessing price reactions to downgrade events.
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N.J. Carpenters Health Fund v. DLJ Mortg. Capital, Inc., 2011 WL 3874821 (S.D.N.Y. Aug. 16,
2011).
Plaintiffs brought a putative class action under the Securities Act of 1933, claiming that
offering documents issued by the defendants in connection with plaintiffs’ private placement
purchase of mortgage-backed securities issued by trusts as pass-through certificates contained
materially misleading misstatements and omissions. In granting class certification, the district
court rejected the defendants’ arguments that differences between class members with respect to
damages and timing of purchases precluded finding typicality, concluding that the supposed
differences were merely speculative. The court also concluded that any potential individualized
issues regarding the plaintiffs’ knowledge of the alleged misrepresentations and omissions did
not predominate over the common issues presented by the case.
Public Emps. Ret. Sys. of Miss. v. Merrill Lynch & Co., 2011 WL 3652477 (S.D.N.Y. Aug. 22,
2011).
Plaintiff-investors moved for class certification in action against investment firm,
alleging securities fraud in connection with firm’s sale of mortgage pass-through certificates.
The district court granted class certification, rejecting the defendants’ arguments that issues
regarding the existence and materiality of the alleged misstatements, loss causation, the
expiration of the limitations period, and the plaintiffs’ knowledge of the alleged misstatements
were not susceptible to class-wide proof. In doing so, the district court held that the action
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