Two Funds File $28M RMBS Suit Against TCW

On November 21, two private funds based in the Cayman Islands, Basis Pac-Rim Opportunity Fund and Basis Yield Alpha Fund, sued TCW Asset Management Company in the Supreme Court for the State of New York over their alleged purchase of $28 million in RMBS and CDOs through a TCW investment vehicle.  The funds allege that TCW knowingly made material misrepresentations and omissions about the current and expected performance of the investment vehicle’s portfolio, the criteria it used to select the portfolio, and the mortgage-backed bond market.  The funds’ causes of action against TCW include fraudulent concealment, negligence misrepresentation, breach of contract, and unjust enrichment.  The funds seek over $28 million in damages. Complaint.