SDNY Judge Dismisses MBS Suit against Countrywide

On March 16, 2011, Southern District of New York Judge Kevin Castel granted summary judgment to Countrywide Financial Corporation in a suit claiming that Countrywide had issued risky subprime home loans and misled investors about their underwriting guidelines. Judge Castel ruled that the suit was barred by the Securities Act of 1933’s three-year statute of repose because it was commenced more than three years after the filing of the registration statements and prospectus supplements at issue (the relevant date for plaintiffs’ ’33 Act Section 11 claims) and also more than three years after the securities were sold to plaintiffs (the relevant date for Section 12(a)(2)). Judge Castel rejected plaintiffs’ argument that their claims were tolled by the earlier filing of a class action. Decision.