Nicholas Poli is a partner in Orrick's Complex Litigation and Dispute Resolution Group. Based in New York, Nick is an experienced trial lawyer with a successful track record representing sophisticated financial institutions in their most important matters in state, federal, and bankruptcy courts across the country. Nick's practice focuses on the financial services sector, including bankruptcy litigation on behalf of creditors and Trustees, as well as securities litigation, and residential mortgage-backed securities defense. Nick also helps guide clients through business-critical issues, including trade secrets disputes.
Nick is an experienced bankruptcy litigator, representing financial institutions, pharmaceutical companies, and trustees in all stages of the bankruptcy process. Most recently, Nick served as co-lead trial counsel to the private credit arm of a global financial company and secured a $100 million trial victory in connection with multiple defaulted loans.
Nicholas also 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 has defended a global financial institution in connection with two separate trials in the New York Supreme Court.
Nicholas is a key member of the Orrick team that represents Goldman Sachs and Credit Suisse, multinational investment banks and financial services companies, in connection with more than a dozen cases. This includes defending the clients 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 has also represented one of the nation’s largest mortgage loan servicers, including in a class action lawsuit involving allegations of improper loan servicing practices.
On May 2, 2016, the First Circuit Court of Appeals reinstated a $5.9B suit brought by the Federal Home Loan Bank of Boston (“FHLBB”), alleging that Moody’s Corp and Moody’s Investor’s Service, Inc. (together, “Moody’s”) knowingly provided false ratings on certain Residential Mortgage-Backed Securities purchased by FHLBB. The case had been dismissed for lack of personal jurisdiction by Judge George A. O’Toole Jr. of the District of Massachusetts, who also held that the court could not transfer the case to another federal court where jurisdiction would be proper because 28 U.S.C. §1631 only permitted the transfer of cases dismissed for lack of subject matter jurisdiction, rather than personal jurisdiction.
The First Circuit vacated that decision, concluding that the plain language of 28 U.S.C. §1631, the statute’s legislative history, and case law from other Circuits all weighed in favor of a ruling that the statute also permits transfer where the claims at issue were dismissed on either personal or subject matter jurisdiction grounds. Accordingly, the First Circuit remanded the case to the district court to determine whether transfer was “in the interests of justice,” in accord with the statutory requirement for transfer under 28 U.S.C. §1631. Decision.
On April 25, 2016, the Federal Home Loan Bank of Seattle (“FHLBS”) agreed to a $190 million settlement with Bank of America in connection with multiple lawsuits filed in 2010 stemming from the sale of hundreds of millions of dollars of RMBS. FHLBS alleged that Bank of America made misstatements or omissions in connection with the issuance of the RMBS in violation of the Washington State Securities Act. Additional details of the settlement are not publicly available.
On January 20, trial commenced before Justice Marcy Friedman in New York County Supreme Court to determine whether Deutsche Bank, U.S. Bank, and the other trustees of 330 RMBS trusts acted reasonably when they reached a $4.5 billion settlement of claims against JP Morgan in its capacity as sponsor of those trusts. Under the proposed agreement, JP Morgan would make a $4.5 billion payment to be distributed among the trusts and perform certain mortgage loan servicing improvements in exchange for a release of claims related to mortgage loan representations and warranties and mortgage loan servicing. There are two objectors that have challenged the validity and fairness of the settlement: Ambac, which insured eight of the trusts, and W&L Investments, LLC, a certifcateholder in two of the trusts. The trial is expected to last roughly two weeks. Amended Petition.
On November 24, 2015, a group of investors, led by Pacific Investment Management Co. (“PIMCO”), filed suit in the Supreme Court of the State of New York against Citibank, N.A., as trustee of 25 private-label RMBS Trusts. This state court complaint follows the Southern District of New York’s dismissal of a similar action for lack of jurisdiction over claims relating to the majority of trusts, as discussed here. The investors allege that Citibank knew the trusts contained loans that breached seller representations and warranties, and that Citibank failed to perform its contractual obligations to require the sellers to cure or repurchase the defective loans. Plaintiffs further allege that Citibank breached its duties to enforce the obligations of loan servicers by failing to redress alleged servicer misconduct. The complaint also alleges breaches of Citibank’s fiduciary duties and a violation of New York’s Streit Act. Complaint.
On July 10, 2015, Judge Denise Cote of the Southern District of New York granted partial summary judgment in favor of defendants WMC Mortgage LLC and GE Mortgage Holding LLC in an action filed by Trustee Bank of New York Mellon (“BoNY”) in connection with the sale of over $900 Million in RMBS. Judge Cote dismissed BoNY’s failure to repurchase claim against WMC, citing ACE v. DB Structured Products, which held that a failure to repurchase claim is not a separately enforceable right that gives rise to a separate breach of contract claim independent of a claim for breach of representations and warranties. Judge Cote also dismissed BoNY’s indemnification claims against both defendants as duplicative of BoNY’s claim for breach of the representations and warranties in the Mortgage Loan Purchase Agreements (“MLPAs”). BoNY’s primary claim, for breach of representations and warranties, was not a subject of the motion for partial summary judgment. Opinion and Order.
In a separate decision, also issued on July 10, Judge Cote denied the defendants’ request for a jury trial, holding that the Trustee’s remaining claims, for breaches of the MLPAs and Pooling and Servicing Agreement seek equitable remedies. Opinion and Order.
On July 10, 2015, Judge Alvin Hellerstein of the Southern District of New York granted defendant WMC Mortgage LLC’s motion for judgment on the pleadings in an action brought by the Federal Housing Financial Agency (“FHFA”) and Deutsche Bank National Trust Co. (“DBNTC”), in its capacity as Trustee of the SABR 2006-WM4 Trust. Judge Hellerstein held that the action was time-barred under New York’s six-year statute of limitations, citing the New York Court of Appeals’ decision in ACE Securities Corp., Home Equity Loan Trust, Series 2006-SL2 v. DB Structured Products, Inc. Judge Hellerstein concluded that the date on which the statute of limitations began to run was the signing date of the Pooling and Servicing Agreement, as opposed to the closing date, because the signing date was the point at which “all the right, title and interest” to the mortgage loans were transferred to the Trustee, and when all misrepresentations were made. Order.
On June 11, 2015, the New York Court of Appeals issued its decision in the closely-followed case of ACE Securities Corp., Home Equity Loan Trust, Series 2006-SL2 v. DB Structured Products, Inc. New York’s highest court affirmed the First Department’s dismissal of an action brought by HSBC, as Trustee of the Home Equity Loan Trust, Series 2006-SL2 (“Trust”), against DB Structured Products (“DBSP”) on timeliness grounds, concluding that a cause of action for breach of the representations and warranties accrues on the closing date of the transaction. The Court held that New York’s six-year statute of limitations for such breach of contract claims runs from the date the representations and warranties are made. While the trial court reasoned that DBSP’s cure or repurchase obligation under the Pooling and Servicing Agreement (“PSA”) was ongoing, the Court of Appeals explained that DBSP represented and warranted certain facts about the mortgage loans as they existed when the PSA and Mortgage Loan Purchase Agreement were executed and expressly stated they did not survive the closing date. The Court noted that it makes sense that DBSP “[did] not guarantee payment for the life of the transaction because loans may default 10 or 20 years after they have been issued for reasons entirely unrelated to the Sponsor’s representations and warranties.” The court also held that a timely repurchase demand and subsequent expiration of the cure period was not a substantive condition precedent that delayed the accrual of the cause of action; instead, the Court held that it was a procedural prerequisite to suit. Order.
On March 31, 2015, Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York denied HSBC Bank USA, National Association’s (“HSBC”) motion to dismiss an action brought by a consortium of investors in RMBS for lack of subject matter jurisdiction. The plaintiffs’ Complaint alleges, inter alia, that HSBC failed to discharge its duties as Trustee for 271 RMBS Trusts in violation of the Trustee Indenture Act (“TIA”) and state common law. Because the TIA governs only 27 of the 271 Trusts at issue, the plaintiffs invoked supplemental jurisdiction as the basis for the court to hear the claims as to the remaining 244 Trusts. Judge Scheindlin denied HSBC’s motion, holding that the plaintiffs’ claims all arise from the “same nucleus of operative fact” because the relevant governing agreements all contain substantially similar contract provisions and impose similar duties on HSBC in its capacity as Trustee. Judge Scheindlin added that judicial economy would be served by retaining supplemental jurisdiction as proof of both the TIA and non-TIA claims would require depositions of many of the same witnesses. Order.
On March 27, 2015 Judge John Robert Blakely of the U.S. District Court for the Northern District of Illinois granted Standard & Poor’s Financial Services, LLC’s and Moody’s Investors Service, Inc.’s motion to dismiss claims brought by First National Bank and Trust Co. of Rochelle, Illinois arising out of First National’s purchase of certain RMBS certificates. First National asserted causes of action under the Illinois Consumer Fraud and Deceptive Business Practices Act, the Uniform Deceptive Trade Practices Act, as well as other common law misrepresentation claims, alleging that it had been induced to purchase the certificates in reliance upon misstatements by the ratings agencies. Judge Blakely dismissed the complaint as time-barred by the Illinois Securities Law’s five-year statute of repose. He first concluded that the ISL’s statute of repose applied to First National’s claims because the facts alleged, if proven, would have established a violation of the ISL sections on fraud or deceit in connection with the purchase or sale of securities, and because the ISL specifically provided for the injunctive relief requested by First National. Judge Blakely then found all claims untimely because the RMBS certificates at issue were purchased in February 2008, five years and four months before First National’s suit was filed. Order.
On April 2, 2015, plaintiffs BNP Paribas Mortgage Corporation and BNP Paribas and defendant Bank of America filed a Joint Stipulation of Dismissal with Prejudice stating that both parties had reached an agreement to settle claims arising out of Bank of America’s handling of $480.7 million worth of mortgage-backed notes issued by Taylor Bean and Whitaker’s Ocala Funding LLC. Plaintiffs Complaint alleged that Bank of America, which served as agent, custodian, depositor, and Indentured Trustee of the Ocala facility, failed to live up to its contractual obligations to secure and protect the cash and mortgage loans collateralizing the notes. The details of the settlement are not yet public. Joint Stipulation.
