New Mexico State Court Allows Plaintiffs to Continue on Fraud Against Taxpayers Act Claims Involving RMBS

On February 7, 2011, a New Mexico court issued an order in State of New Mexico, ex rel. Foy v. Vanderbilt Capital, allowing plaintiffs to continue to pursue claims under New Mexico’s Fraud Against Taxpayers Act (the “FATA”) against a variety of defendants in connection with New Mexico’s investments in certain CDOs backed by allegedly misrepresented mortgage assets. The court previously held in April 2010 that New Mexico’s FATA claims could not be predicated on acts prior to July 1, 2007 because such retroactive application of the FATA would violate the Ex Post Facto Clauses of both the U.S. Constitution and the New Mexico Constitution. The new order finds that plaintiffs have alleged acts that occurred on or after July 1, 2007 that are sufficient to satisfy the court that the FATA claims remain “viable and relevant.” February 2011 Order. April 2010 Order. Complaint.