Nicholas Poli

Managing Associate

New York


Read full biography at www.orrick.com
Nicholas Poli specializes in complex commercial litigation representing large, sophisticated clients in their most important matters in state and federal courts across the country.

Nicholas has extensive experience in issues arising out of the financial crisis, including a range of issues relating to residential mortgage backed securities (“RMBS”) and lending practices. He has represented issuers and sponsors of RMBS in fraud and breach of contract cases, as well as federal and state securities actions. Nicholas also served as the lead associate on a trial team that defended a global financial institution during a two-week trial in the New York Supreme Court.  

Nicholas is a key member of the Orrick team that represents Credit Suisse, a Swiss multinational investment bank and financial services company, and has represented this client in more than a dozen cases. This includes defending the client against claims brought by investors, trustees, and monoline insurance companies in connection with the purchase and sale of RMBS. Nicholas also completed a secondment at Credit Suisse, where he was in the litigation and investigations group. During this time, he worked on regulatory matters involving FINRA, the SEC, the DOJ, the CFTC, and the NY Department of Financial Services. Additionally, he handled internal investigations addressing issues such as insider trading.

Nicholas is also a member of the Orrick team representing one of the nation’s largest mortgage loan servicers. This engagement covers all of the company’s RMBS related legal issues. Nicholas has also represented this company in a class action lawsuit involving allegations of improper loan servicing practices.

Posts by: Nicholas Poli

Lehman Brothers to Pay $2.38 Billion in Connection with RMBS Claims

 

On March 8, 2018, Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York issued a decision from the bench valuing RMBS breach of representation and warranty claims against now-defunct Lehman Brothers Holdings Inc. at approximately $2.38 billion. While the Trustees of the Lehman-issued RMBS at issue sought an $11.4 billion valuation, the Court concluded that such a figure was not a fair or reasonable estimate of the claims, particularly in light of the fact that over a dozen institutional investors agreed to the lower figure earlier in the proceedings. The Court also highlighted that the Trustees could not point to any comparable settlement to support their valuation.

SDNY Grants Trustees’ Motion to Dismiss Triaxx CDOs’ RMBS Claims with Prejudice

 

On March 8, 2018, Judge Naomi Reice Buchwald of the United States District Court for the Southern District of New York issued a Memorandum and Order granting Defendants’ motion to dismiss Plaintiffs’ Third Amended Complaint in its entirety in Triaxx Prime CDO 2006-1, Ltd., et al. v. The Bank of New York Mellon and U.S. Bank, N.A., and forbidding Plaintiffs from amending the Complaint any further. In dismissing Plaintiffs’ breach of contract claims for lack of standing, the Court found that Plaintiffs failed to remedy the deficiencies that previously resulted in dismissal of these same claims, covered here (“Triaxx I“), because Plaintiffs assigned away their right to sue under the contracts. Judge Buchwald also dismissed Plaintiffs’ negligence and breach of fiduciary duty claims because Plaintiffs failed to allege that Defendants owed them any duty of care or fiduciary duty. Additionally, the Court held that the fiduciary duty claims were an improper attempt to re-plead claims already dismissed as abandoned in Triaxx I, and in any event, the claims were barred by New York’s economic loss doctrine. Plaintiffs’ claim for equitable relief directing U.S. Bank to assign Plaintiffs the authority to sue was also dismissed as inappropriate and unsupported by law. [Memorandum and Order]

RBS Settles RMBS Suit for $1.1 Billion

On September 27, 2016, the Royal Bank of Scotland (“RBS”) announced a $1.1 billion settlement with the National Credit Union Administration (“NCUA”) in connection with two federal securities litigations concerning RBS’s underwriting and sale of RMBS. The NCUA, as liquidating agent for Western Corporate Federal Credit Union and U.S. Central Federal Credit Union, brought these actions against RBS and other defendants, claiming that the defendants had misled the credit unions about the risks of RMBS and made various misrepresentations in the offering documents.  Further details of the settlement are not publicly available.

U.S. Bank and WMC Settle Four RMBS Lawsuits

On September 22, 2016, RMBS Trustee U.S. Bank National Association (“U.S. Bank”) and loan originator WMC Mortgage LLC (“WMC”) filed a stipulation of dismissal in four RMBS lawsuits in light of a settlement reached between the parties. The details of the settlement are not publicly available.  The settlement resolves three lawsuits initiated by U.S. Bank, alleging that WMC misrepresented the quality of loans it sold in 2006 and 2007 RMBS offerings, as well as a lawsuit brought by WMC against U.S. Bank, seeking a declaratory judgment regarding WMC’s performance under the governing agreements of an RMBS deal.  Two of U.S. Bank’s lawsuits include claims against loan originator Equifirst Corporation, but these claims are not part of the settlement. Stipulation of Dismissal.

New York Intermediate Appellate Court Holds that Accrual Provision Does Not Save RMBS Trustee’s Time-Barred Putback Claim

 

On August 11, 2016, the First Department of the Appellate Division of the Supreme Court of the State of New York affirmed dismissal of an action brought by Deutsche Bank National Trust Company, as RMBS Trustee, against Quicken Loans, Inc. Following the New York Court of Appeals decision in the closely-followed case of ACE Securities Corp., Home Equity Loan Trust, Series 2006-SL2 v. DB Structured Products, Inc. (covered here) – which held that a breach of contract claim in an RMBS putback action accrues on the date the representations and warranties are made – the First Department concluded Deutsche Bank’s action was time-barred, notwithstanding the presence of an accrual provision in the transaction documents that might have otherwise delayed the accrual of putback claims indefinitely. The decision holds that such accrual provisions are unenforceable attempts to extend the statute of limitations. Order.

New York Appellate Court Allows Fraud Claim to Proceed Against Morgan Stanley

On August 11, 2016, the First Department of the Appellate Division of the Supreme Court of the State of New York affirmed a trial court ruling that investor-plaintiff IKB International to proceed with claims that RMBS sponsor and underwriter Morgan Stanley knowingly misrepresented loans’ credit quality and characteristics. The Court affirmed a ruling that justifiable reliance was adequately pleaded as the complaint contained allegations that (i) plaintiffs hired investment advisors to analyze the offering documents for the 18 RMBS deals at issue; and (ii) plaintiffs lacked the access to (and the ability to demand) loan files prior to purchase.

Additionally, the Court agreed that the plaintiffs adequately pleaded the fraud element of scienter by alleging that Morgan Stanly learned about the loans’ defects during the course of its own due diligence reviews, and in its role as underwriter. Order.

New York Appellate Court Reverse Lower Court, Allows RMBS Action to Proceed Against Morgan Stanley

 

On August 11, 2016, the First Department of the Appellate Division of the Supreme Court of the State of New York reversed the lower court, allowing RMBS Trustee U.S. Bank to proceed with claims against Morgan Stanley in connection with alleged losses of $140 million resulting from the sale of allegedly defective loans. Following its own ruling from last year (covered here), the First Department again concluded that the alleged failure to notify securitization counterparties of breaches of representations and warranties constitutes a viable cause of action independent from claims arising from the alleged breaches themselves. The First Department also reversed dismissal of the plaintiff’s gross negligence claims noting that – notwithstanding language in the governing contract’s sole remedy provision – the law does not permit a party to insulate itself from paying for damages arising from its grossly negligent conduct. Order.

WMC Settles $1 Billion RMBS Suit During Pendency Of Appeal

 

On August 9, 2016, RMBS trustee Deutsche Bank National Trust Company and WMC Mortgage, LLC, filed a joint motion to stay an appeal pending in the Court of Appeals for the Second Circuit. The parties requested the stay to allow them time to finalize the settlement of a lawsuit alleging that WMC misrepresented the quality of loans it sold in a $1 billion 2006 RMBS offering. The trial court had previously dismissed the lawsuit in 2015 (covered here) as time-barred under New York’s six-year statute of limitations. Joint Motion.

New York Appellate Court Holds Repurchase Demand Analysis Is Not Protected Work Product

On June 23, 2016, the First Department of the Appellate Division of the Supreme Court of the State of New York decided an appeal in an action brought by Bank of New York Mellon, as RMBS Trustee, against WMC Mortgage and JP Morgan. In its decision, the Court held that originator WMC’s repurchase demand analysis is not protected work product because it was not primarily prepared in anticipation of litigation and was a regular part of the loan originator’s business. The court therefore affirmed the decision of the trial court, Justice Shirley Werner Kornreich, ordering WMC Mortgage to produce the repurchase demand analysis. Order.

RMBS Suit to Proceed Against Morgan Stanley

On June 16, 2016, Justice Marcy S. Friedman of the Supreme Court of the State of New York largely denied Morgan Stanley’s motion to dismiss a breach of contract action brought by RMBS trustee Wilmington Trust Company. The court dismissed the trustee’s claim for indemnification of attorney’s fees, finding that the contracts did not unmistakably contemplate such indemnification. The court denied without prejudice defendant’s motion to dismiss the trustee’s claim as to non-Morgan Stanley loans in the offering at issue, as the parties did not have the opportunity to address the import of recent RMBS precedent or whether the repurchase demand in this case included any such loans. The court will receive further briefing on the import of a 2015 intermediate appellate court decision, previously covered here, on plaintiff’s claim that the bank improperly failed to notify the trustee of breaches Morgan Stanley discovered. The court denied the remainder of Morgan Stanley’s motion to dismiss. Following her prior decisions (such as her decision in ACE on remand from the Court of Appeals, covered here), Justice Friedman held that the trustee’s claims for breach of contract were timely filed within the statute of limitations, and that its claim for damages was not precluded by the repurchase protocol. Order.