Mortgage Backed Securities

On June 17, 2011, King County Washington Superior Court Judge Catherine Shaffer denied in its entirety motions to dismiss filed by the defendants in Federal Home Loan Bank of Chicago v. Banc of America Securities LLC, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co, RBS Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., Long Beach Securities Corp, WAMU Asset Acceptance Corp, WAMU Capital Corp. The Federal Home Loan Bank of Chicago seeks, among other remedies, rescission of over $100 million of mortgage-backed securities issued or underwritten by the Defendants based on offering documents that misrepresented the risks of the securities and the quality of the mortgage loans backing the securities. Discovery is now under way in the action. Keller Rohrback represents the Federal Home Loan Bank of Chicago in this, and two other actions seeking, in total, rescission of over $3 billion of mortgage-backed securities purchased from these and other Defendants. To view the order denying the motions to dismiss click here.

Keller Rohrback also represents the Federal Home Loan Banks of Indianapolis and Boston in similar actions related to the purchase of mortgage-backed securities.

Keller Rohrback L.L.P. continues to investigate claims relating to private label mortgage backed securities (“PLMBS”) and investment instruments related to PLMBS, such as credit default swaps (“CDS”) and collateralized debt obligations (“CDO”), that were issued and sold by financial institutions to investors based on misrepresentations and omissions in the offering documents. Our investigation has revealed that when financial institutions offered and then sold PLMBS to investors such as the Federal Home Loan Banks, they made numerous untrue, incomplete, and inaccurate statements to the investors about the PLMBS and the credit quality of the mortgage loans that backed them.

Keller Rohrback is uniquely positioned to be an effective advocate for investors on claims involving mortgage backed securities. Based on our extensive experience in securities fraud and other litigation involving mortgage backed securities and subprime lending, our attorneys and legal staff are experienced and ready to identify, review, and vigorously pursue our investors’ strongest claims. We regularly represent plaintiffs—including institutions and individuals—in complex and class action cases.

I.     INVESTORS’ POTENTIAL CLAIMS.

The principal claims arising out of investment in PLMBS involve misleading statements and omissions made in connection with the sales of the securities in offering documents. These claims are most often based on violation of the applicable state securities “blue sky” laws, federal securities laws, and common law. Defendants include the issuers of the securities, underwriters, control persons, and other persons directly or indirectly involved in the sales (including, for example, credit rating agencies whose ratings misrepresented the credit quality of the securities). Depending on the location of the parties involved in the sale of securities, additional claims for fraud, negligence, breach of contract, unjust enrichment, unfair competition, or interference with contract or prospective economic advantage may also exist under the laws of multiple states.

The law varies significantly with respect to the conduct on which a claim may be based, the remedies available, persons who may be liable, and statutes of limitation. As a general matter state blue sky laws offer robust remedies (including rescission) and a reasonably generous statute of limitations. Determining whether claims may be asserted under the state blue sky laws and/or other potentially applicable laws is highly fact-specific, and requires a careful analysis of, among other things, the applicable disclosure documents.

Keller Rohrback is available to review the materials provided to investors in connection with the sale of each relevant security, to consult with personnel who are familiar with the investments in those securities, and prepare a detailed analysis with a careful assessment of investors’ rights and potential remedies.

II.     KELLER ROHRBACK HAS BEEN RETAINED BY LARGE-SCALE INVESTORS TO PURSUE RECOVERY ON BILLIONS OF DOLLARS OF PLMBS SALES.

Keller Rohrback's knowledge and experience in litigation of this type has led to their retention by large-scale investors, including several large regional financial institutions with significant investments in AAA-rated (prime, sub-prime, and Alt-A) PLMBS, to pursue claims against entities involved in the sale of PLMBS. Keller Rohrback has filed several complaints on behalf of investors from all over the country based on our extensive investigation of PLMBS securitization practices, as well as a detailed review and analysis of over 100 securities with an original face value of over $6 billion, against over 100 defendants. The cases seek rescission under state blue sky laws and the federal securities laws, and also allege negligent misrepresentation. We are also preparing complaints for other similar entities that intend to pursue PLMBS claims.

III.     KELLER ROHRBACK HAS BROAD EXPERIENCE LITIGATING CASES INVOLVING COMPLEX FINANCIAL TRANSACTIONS, INCLUDING MORTGAGE BACKED SECURITIES AND OTHER SOPHISTICATED FINANCE AND LENDING ARRANGEMENTS.

In addition to our experience representing the large-scale investors in PLMBS litigation, Keller Rohrback has a wealth of experience litigating complex financial fraud claims. Our attorneys have successfully pursued dozens of cases on both an individual and class-wide basis pursuant to federal statutory law and state statutory and common law, including claims of misrepresentation, rescission, breach of contract, breach of fiduciary duty, negligence, and statutory securities and ERISA claims. A number of our recent cases in which we were selected by federal courts to serve as lead or co-lead counsel challenge the mortgage origination and securitization practices of subprime lenders and other financial institutions whose conduct caused significant losses to retirement plans, including cases against:

  • American International Group, Inc. 
  • The Bear Stearns Companies, Inc. 
  • Beazer Homes U.S.A., Inc. 
  • The Colonial BancGroup, Inc. 
  • Countrywide Financial Corporation 
  • Fremont General Corporation 
  • IndyMac Bancorp, Inc. 
  • Merrill Lynch & Co., Inc. 
  • Regions Financial Corporation 
  • State Street Bank & Trust Co. 
  • Wachovia Corporation 
  • Washington Mutual, Inc.

If you are an investor of one a PLMBS and have suffered losses as a result of the above-mentioned practices by investments in PLMBS, you may contact attorneys Derek Loeser, Beth Leland, or Lynn Sarko toll free at (800) 776-6044, or via e-mail at investor@kellerrohrback.com.

Keller Rohrback is one of America’s leading law firms handling securities-related litigation. We are committed to helping investors protect their investment options. Keller Rohrback serves as lead and co-lead counsel in numerous class action cases. Keller Rohrback has successfully provided class action representation for over a decade. Its trial lawyers have obtained judgments and settlements on behalf of clients in excess of seven billion dollars.