Paul F. Rugani

Partner

Orange County

prugani@orrick.com

Read full biography at www.orrick.com

Financial institutions, accounting firms, and public companies turn to Paul Rugani to advise them in connection with their most significant exposures. Paul has helped his clients achieve victories through motion practice, at trial, and on appeal. And his advocacy for clients before government regulators has successfully minimized or avoided potential enforcement action.

Legal 500 touts Paul as a recommended attorney for Securities Litigation, observing that he is “among the most creative and strategic lawyers” who always has “an eye on the end game.”  Paul achieved American Lawyer Litigator of the Week recognition as part of a team that achieved a ground-breaking New York Court of Appeals victory that substantially reduced financial exposure in RMBS repurchase litigation.

Leader of Orrick's Securities Litigation practice and deputy leader of the Firm's Financial Services Litigation practice, Paul has extensive experience representing clients in securities class actions, shareholder derivative lawsuits, commercial contractual disputes and other complex litigation matters at both the trial and appellate levels, as well as in connection with internal, government and regulatory investigations. Paul also counsels domestic and foreign accounting firms on matters related to state CPA licensing and state board regulation.

Posts by: Paul Rugani

S&P Settles RMBS Lawsuits for $1.375 Billion

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On February 2, Standard & Poor’s Ratings Services settled claims brought by the Department of Justice, 19 states and the District of Columbia related to credit ratings it issued and maintained for RMBS and CDOs before the financial crisis. As part of the settlement, it agreed to pay a total of $1.375 billion, with $687.5 million paid to the Department of Justice and $687.5 million to the states and District of Columbia.  Settlement Agreement.

Also on February 2, S&P settled similar claims brought by the California Public Employees’ Retirement System (CalPERS). The terms of that settlement agreement have not been made public.

 

JP Morgan Settles RMBS Lawsuit for $500 Million

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On February 1, JP Morgan Chase & Co. settled federal securities claims brought by investors led by the Public Employees’ Retirement System of Mississippi and the New Jersey Carpenters Health Fund related to Bear Stearns’ sale of $17.58 billion in residential mortgage-backed securities. The settlement is subject to approval by U.S. District Judge Laura Taylor Swain of the United States District Court of the Southern District of New York.  Settlement Agreement.

ResCap Liquidating Trust Repurchase Lawsuit Survives Motion to Dismiss in Part

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On February 3, Judge Martin Glenn of the United States Bankruptcy Court of the Southern District of New York denied defendants’ motions to dismiss four adversary proceedings brought by the liquidating trust for Residential Capital LLC against several originators of residential mortgage loans. The court ruled that the ResCap Liquidating Trust was the real party in interest and therefore had standing to pursue claims against the originators for breach of representations and warranties. The defendants also argued that the Trust lacked standing to sue with regard to loans that had been securitized, because a predecessor ResCap entity had assigned its rights concerning those loans to third-parties. The court rejected this argument, holding that the scope of the assignments raised factual questions that could not be resolved at the motion to dismiss stage. The court granted defendants’ motion to dismiss claims with respect to certain loans as time-barred, holding that New York’s six-year statute of limitations expired as to all loans sold to ResCap prior to May 14, 2006 (six years before the adversary proceedings were filed). Finally, the Court declined to rule on the scope of the remedy available to the Trust at the pleading stage.  Memorandum Opinion and Order.

Court Declines to Vacate Jury Verdict in Countrywide FIRREA Lawsuit

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On February 3, Judge Jed S. Rakoff of the United States District Court of the Southern District of New York denied Bank of America Corporation’s and Rebecca Mairone’s motion for judgment as a matter of law, or, in the alternative a new trial. The jury found Bank of America and Mairone liable under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) for the sale of mortgage loans to Fannie Mae and Freddie Mac before the financial crisis. Judge Rakoff found that the jury’s October 23, 2013 verdict was supported by sufficient evidence.  Order.

Ambac Sues Countrywide For Alleged Fraud in Connection with $1.7 Billion in RMBS

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On December 27, Ambac Assurance Corporation filed a complaint against several Countrywide entities and Bank of America Corporation in New York state court, seeking to recover at least $600 million in damages in connection with claims payments Ambac allegedly made under insurance policies it issued on eight RMBS trusts. Ambac alleges that between 2005 and 2007, Countrywide made false and misleading statements at meetings with Ambac and in prospectus supplements and loan tapes issued in connection with the trusts that induced Ambac to issue its insurance policies. Ambac asserts a cause of action for fraudulent inducement against the Countrywide entities and a cause of action for successor liability against Bank of America.  Complaint.

NCUA Sues Deutsche Bank National Trust Co. For Allegedly Failing to Comply With RMBS Trustee Duties

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The National Credit Union Administration, acting as liquidating agent for five failed credit unions, sued Deutsche Bank National Trust Company (DBNTC) for allegedly breaching its duties as trustee under the governing trust agreements for 121 RMBS trusts with a total original face value of approximately $140 billion. The complaint, filed November 10, in the U.S. District Court for the Southern District of New York, asserts causes of action under the Trust Indenture Act and a provision of the New York Real Property Law known as the Streit Act. The complaint alleges that DBNTC failed to properly review and monitor the loans underlying the RMBS, notify the investors of deficiencies in the loans, take action to address those alleged deficiencies, and enforce the repurchase of defective loans as provided for in the governing agreements. The complaint also alleges that DBNTC failed to exercise proper oversight over the loans’ servicers, including by failing to declare the servicers and master services in default under the agreements. NCUA seeks unspecified damages, equitable relief, pre- and post-judgment interest, and fees and costs.  Complaint.